Middle market consumer goods companies face shifts in strategy from growth to profitability.
Consumer goods industry outlook key takeaways
Inventory planning will surpass supply chain disruption concerns.
A long-term decoupling from China will require companies to identify new supply chain strategies.
Outlook
From growth to profitability
Consumer goods companies will shift focus from growth to profitability.
Spring 2023
From growth to profitability
Consumer goods companies that benefited from elevated demand during the pandemic are reexamining their operational strategies as consumers become more strategic about spending and look for value in their purchases. This shift is driven by deflationary price pressure, production costs, a tight labor market, and increasing borrowing costs.
As consumer demand decreases, middle market companies should focus on maintaining profitability by controlling costs, automating processes, removing low-margin products, and getting rid of underperforming product lines. Supply chains should be a primary area for review, and manufacturing hubs should be a primary discussion point.
Outlook
New home sales will affect home products consumption through 2023
Home products companies should be prepared for a sustained period of economic pressure.
Winter 2023
New home sales will affect home products consumption through 2023
Historically, consumption of home products correlates to new home sales, as many homebuyers refurnish or upgrade appliances within a year of a new home purchase. This correlation shifted during the COVID-19 pandemic as a result of the surge in mortgage refinancing and shifts in consumer spending toward goods and away from services.
In periods of uncertainty, as we expect in 2023, the effective use of real-time data to manage the business will differentiate companies looking to thrive versus simply survive.
RSM contributors
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