Consumer & retail CEOs balancing economic fears with investment in AI

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• 82 percent of C&R CEOs are confident about their company’s growth prospects but only 59 percent are optimistic about economic growth, the lowest of all industries surveyed
• In 2024, the top three challenges noted for C&R CEOs include economic uncertainty (58 percent), geopolitical complexities (53 percent), and the adoption of Gen AI (48 percent)
• 81 percent of C&R CEOs recognize sales and marketing as a key investment area for Gen AI
• 84 percent (the highest of all sectors) state that a degree of regulation regarding Gen AI should mirror that of climate commitments
• For 74 percent of C&R CEOs, ESG principles are now fully embedded into their businesses and 63 percent are confident that they will meet net zero goals by 2030 - significantly higher than the 51 percent cross-industry average

Bangkok, 23 December 2024 – CEOs of consumer and retail (C&R) businesses are confident about their own company’s growth prospects but divided over economic growth over the next three years, a survey of 120 sector leaders from across the world finds.

The KPMG 2024 CEO Outlook, now in its tenth year globally, reveals 82 percent of C&R leaders believe they’re on a growth trajectory (up from 79 percent in 2023) but only 59 percent feel the same way about broader economic growth – the lowest of all industries surveyed by KPMG.

In 2024, the top three challenges noted for C&R CEOs include economic uncertainty (58 percent), geopolitical complexities (53 percent), and the adoption of Gen AI (48 percent). Despite these challenges, their convictions about sector growth continue to strengthen, up to 81 percent from 76 percent in 2023 and above the cross-industry average of 74 percent. This positive sentiment may be fueled by the C&R sector’s position within the “real economy,” providing essential goods and services that remain relevant even in times of economic uncertainty. 

Gen AI is firmly on the C&R CEO agenda, with 81 percent recognizing it as a key investment area, particularly in sales and marketing. While many are already exploring its potential, the focus is shifting from experimental pilots to capturing tangible return on investment. Just over half (67 percent) of C&R CEOs are confident that they will see a return on their Gen AI investments within three to five years.

However, challenges that CEOs identify with Gen AI implementation have shifted this year too. Amid growing concerns about the ethical use and implementation of AI within the media, C&R CEOs are increasingly aware of the risks tied to its rapid adoption. 61 percent identified ethical challenges as some of the most difficult issues to address when implementing AI within their businesses. And, C&R CEOs recognize the need for robust regulation, with the majority (84 percent — the highest of all sectors) stating that a degree of regulation regarding Gen AI should mirror that of climate commitments.

C&R CEOs understand that mastering ESG is integral to their operations, strategies and building public trust. Failure to do so could negatively impact their sustainability and reputation. For 74 percent of the sector leaders, ESG principles are now fully embedded into their businesses. They recognize the importance of sustainability in building customer relationships and brand reputation, with 44 percent believing their ESG strategy has the greatest impact in these areas. 

Furthermore, 63 percent say they are confident in meeting net-zero targets by 2030, significantly higher than the 51 percent cross-industry average. This confidence is somewhat surprising given that many C&R companies, in their own climate action plans, acknowledge significant gaps in their roadmaps to net zero. This suggests that despite these challenges, C&R leaders have strong faith in their experienced sustainability teams and the progress made over the past decades.

As for Diversity & Inclusion (D&I), over half (51 percent) of C&R CEOs believe that progress on D&I has moved too slowly. For an industry that thrives on diverse, creative talent to innovate and resonate with a broad audience, this is a clear signal that more needs to be done to unlock the full potential of a truly inclusive workforce.

To learn more about KPMG 2024 Consumer and Retail CEO Outlook, please visit https://bit.ly/2024ConsumerRetailCEOoutlook.

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Nichakorn Phathanathavorn

E: nichakorn2@kpmg.co.th