Consumer Based Business Leaders Prioritising Growth

Sustainable growth is defined as the annual percentage of increase in sales that is consistent with a defined financial policy (target debt to equity ratio, target dividend pay-out ratio, target profit margin, target ratio of total assets to net sales).

Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is a multinational professional services network with offices in over 150 countries and territories around the world.

Mike Manby, partner and consumer growth leader at Deloitte: “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.

David Sharman, partner and value creation services lead at Deloitte: “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.”

Key findings in the report:

  • CEO and CFOs of consumer businesses identify priorities for the next 12 months as profitable and sustainable growth, developing existing products and services, and introducing new products and services.
  • Over the same period, however, profits are expected to fall as a result of both COVID-19, and Brexit.
  • Cost reduction programmes are also anticipated to ramp up in 2021 due to the pandemic, and ongoing impact of Brexit.
  • In the short term, the highest risks to business growth are identified as COVID-19 and the state of the United Kingdom economy. Over the next five years, this is superseded by competition from challenger brands and new entrants and disruptive business models. However, the biggest threat to growth over the decade is identified as climate change.
  • 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.