Consumer business leaders to ramp up cost-cutting measures this year, survey finds
The economic pain caused by the pandemic is set to continue in the consumer business sector, as most bosses said they will continue to cut costs for the foreseeable future.
Research showed that 73 per cent of chief executives and chief financial officers are planning to ramp up cost reduction programmes this year due to the pandemic.
Business leaders across the consumer industry expect to reduce capital expenditure while cutting costs, with 44 per cent also citing Brexit as a contributing factor.
Many consumer businesses surveyed by Deloitte said they will reduce hiring in order to keep costs under control, in a further blow to people struggling to find work due to the Covid crisis.
Revenues and profits are also expected to take a hit over the next three years as a direct consequence of the pandemic, Deloitte’s research found.
However, 65 per cent of leaders do not see the switch to online as a risk in future, as they were forced to accelerate the growth of their digital platforms during Covid restrictions.
David Sharman, partner and value creation services lead at Deloitte, said: “With revenues and profits in decline, and uncertainty surrounding the economic recovery from COVID-19, business leaders must make difficult choices.
“Survival cannot become the default mindset for consumer businesses. Indeed, when we asked business leaders to identify their strategic priorities over the year ahead growth was their primary concern.
“At the same time, 81 per cent have made reducing costs a priority, meaning that the pursuit of growth will need to be balanced by financial discipline, and clear targets around return on investment.
“Consumer businesses must find a way to do more with less, or at the very least with the same amount of investment to ensure that growth is profitable.”