What really grays the hair and wrinkles the brows of retail CEOs? For 77%, it’s the ongoing impact of shifting consumer spend and behavior, according to a recent report from PwC.
However, even in this era of rapid and profound change, retailers appear confident about the future overall, especially when compared to leaders in other industries. In fact, 45% of retail CEOs believe their revenues will grow in the next 12 months, compared to only 35% of CEOs in other industries.
As part of its 19th Annual Global CEO Survey, PwC surveyed more than 1,400 chief executives in Q4 2015 to explore how they address business challenges. Of the 1,400 interviewed, 148 CEOs came from retail while an additional 210 headed CPG brands.
Aside from the consumer spending and behavior shifts, retail CEOs identified the following as serious threats to their organizations’ growth prospects:
Exchange rate volatility (81%);
Increasing tax burden (78%);
Government response to fiscal deficit and debt burden (73%); and
Geopolitical uncertainty (73%).
Additionally, as the industry continues to absorb the impact of technology disruption, 62% of retail CEOs express concerns about the increasing complexity of the supply chain. As supply chains grow longer, they have a higher chance of becoming susceptible to newer issues that are largely out of retailers’ control, such as extreme weather events caused by climate change, political unrest and cybercrime.
With so many potential issues pressuring merchants, retail executives are tasked with ensuring that their growth plans benefit multiple stakeholders, including consumers, employees and investors. Now that additional parties have a greater investment than before, 85% of these execs expect to be addressing wider stakeholder concerns.
Retailers are responding by making significant changes to their internal policies, including:
How they manage brand, marketing and communications (57%);
How they use technology to assess and deliver on wider expectations (51%); and
- How they define and manage risk (41%).