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NEW YORK – Executives and C-suite professionals at mid-market retail and consumer packaged goods (CPG) companies are nearly universally optimistic about 2024, with few anticipating a recession. According to a new survey sponsored by Carl Marks Advisors, a leading investment bank, almost 90% of survey respondents expect their sales to remain the same or increase in 2024.
Having absorbed the shocks of the COVID-19 pandemic and subsequent inventory challenges, retail executives remain focused on fine-tuning their supply chains and taking advantage of the latest tools and strategies for mitigating future turbulence. More than half of respondents plan to diversify their supplier base (53%), while a substantial percentage plan to increase onshoring (46%), invest more in supply chain technology (44%) and increase automation (43%).
“With inflation abating and interest rates leveling off, 2024 presents an exciting opportunity for retailers with the courage to embrace out-of-the-box thinking and innovation,” said Howard Meitiner, Managing Director at Carl Marks Advisors. “Retailers who are prepared to re-evaluate their business model and take the necessary steps to invest in integrated omnichannel experiences should be optimistic about the coming year. Following record lows in unemployment and a strong holiday season for retailers now is not the time to be pessimistic. Companies willing to risk trying something different – whether a new strategic partnership or sourcing on-shore – will be rewarded in 2024.”
Most retailers are looking for ways to evolve how they show up in the marketplace, with most either planning to open new storefronts (96%) or close existing locations (89%). Despite plans to shake up the number of brick-and-mortar locations, a minority of respondents said they would invest in more employees (35%) or customer service (39%).
Key findings from the survey:
- AI Will Impact All Aspects of Retail: More than half of respondents plan to invest in AI to support their marketing (56%) and financial forecasting (52%), and fewer than 1% reported no AI investment strategy for the coming year.
- Widespread Optimism: Less than 10% of respondents expect sales to decrease year-over-year. In 2024, just 38% of respondents believe rising inflation will impact supply chain investments.
- Supply Chain Evolution: Fewer than 1% of respondents say they plan on taking no actions to evolve their supplier chain.
- Customer Experience Innovation: Retailers are prioritizing simple and efficient transaction processes and payment options to enhance the experience of their customers, with 37% of respondents investing in buy now, pay later programs and 36% focusing on implementing same-day delivery options.
Carl Marks Advisors sponsored the online survey from October 26-November 10, 2023. In total, 250 responses were collected from executives and C-suite professionals at middle-market retail and CPG companies with annual revenues between $25 million and $300 million.
