CEO and CFOs of consumer businesses identify priorities for the next 12 months as profitable and sustainable growth (85%), developing existing products and services (70%), and introducing new products and services (52%), according to Deloitte.
Over the same period, however, profits are expected to fall as a result of both COVID-19 (41%), and Brexit (50%).
Cost reduction programmes are also anticipated to ramp up in 2021 due to the pandemic (73%), and ongoing impact of Brexit (44%).
In the short term, the highest risks to business growth are identified as COVID-19 (78%) and the state of the UK economy (59%). Over the next five years, this is superseded by competition from challenger brands and new entrants (57%) and disruptive business models (54%). However, the biggest threat to growth over the decade is identified as climate change (50%).
65% of leaders do not see the switch to online as a risk in future, as their response to COVID-19 pandemic has strengthened the online presence of consumer businesses.
Mike Manby, partner and consumer growth leader, said: “The rate of change and disruption is making companies rethink what it means to be a consumer business, not just in the short term but also over the next ten years. Whilst much of the past year has been about survival, consumer business leaders are turning their focus to profit and sustainable growth in the year ahead. This is despite the challenges of pressured profits and significant cost reduction programmes in place. Whilst these ambitions mean leaders face the perennial conundrum of how to do more with less, it also sets out a new blueprint for business.
“Whilst we have seen distress, many consumer businesses across the board have also shown immense resilience in response to the COVID-19 pandemic. One of the most notable has been the shift to online platforms, with innovative online experiences created for consumers to continuing engaging with their favourite brands. It’s encouraging to see so many consumer businesses seeing the switch to online as impetus for further innovation, and no longer a future risk.”
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% 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.”