According to a recent KPMG survey of 100 retail executives, 2023 looms as a more challenging year than 2022, with 73% of retail executives saying that the United States is already in a recession or will enter one in the next six months.
Overall the retail executives said 2022 was a prosperous year with 80% of those surveyed reporting increasing top-line revenue from 2021 and 75% reporting increases in operating profit. Executives polled by KPMG expect e-commerce traffic growth of 51% versus 39% in physical stores.
In the current potentially recessionary environment, 80% of executives worry about operating costs while 75% worry about product input costs and 50% worry about eroded margins. In response, 84% of executives are trying to find cost efficiencies, 67% are renegotiating purchase contracts and 56% are raising prices, although that number has been declining in the KPMG research at a time when consumers are making changes to lower cost brands and retailers, and even deferring purchases to cope with inflation.