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January 19, 2023

KPMG: Retail Executives Ready for Challenging 2023

Posted In: Retail Articles

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.

The figure is up by 32 percentage points from 41% in August of last year. However, 72% expect a recession to last less than a year. Overall, 18% of executives expect retail growth of more than 5%, 31% expect growth of between 2% and 5%,  and 26% expect growth of less than 2%.

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.

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