Light at the End of the Wallet

A new study finds consumer demand poised to make a comeback.
CFO StaffJune 1, 2011

For the better part of three years, CFOs have consistently cited consumer demand (or lack thereof) as among their top concerns, if not their number-one worry. But a new report from CFO Research Services, in collaboration with KPMG, finds that there may be reason for optimism.

In a survey of nearly 300 senior finance executives at consumer-focused companies around the world, 18% expect a significant increase in overall consumer demand this year versus last, and 57% expect some increase. Only 7% expect a decrease of any kind.

However, as we note in “The Great Divide,” that rising demand is expected to take hold much more strongly in some markets than in others. In the United States, 30% of respondents expect to see increased consumer demand this year, while 40% expect to see it next year. The figure is higher for three other major economic regions (see the chart below).

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Asked whether the anticipated increase in demand will give them the leeway to raise prices, respondents are less sanguine. Sixty percent say they think their companies will have difficulty raising prices this year, and 45% believe they will face a challenge in sustaining profit margins.

CFOs thoughts on increasing consumer demand