Magazines Archives - 2011 July

KPMG analysis of Consumer Markets 2011
Despite market volatility and shifting demographics, consumer CFOs see growth in 2011
Story 6 - Market Analysis

Recession-toughened consumer companies demonstrate resilience to the global impact of events in Japan and the Middle East.

Consumer companies around the globe are showing a surprising resilience and guarded optimism about prospects for growth in 2011, even amid continued market volatility and changing demographic trends, according to a new survey from KPMG International.

"An element of cautious optimism is evident but we remain in a state of flux," says Willy Kruh, global chair of KPMG's Consumer Markets Practice. "We're still experiencing an erosion of spending as people are simply spending less, so the focus on cost management going forward is still critical.

"Moreover, the fundamental issues underlying Standard and Poor's revised outlook on the US as well as the threat of rising inflation in China could have repercussions on consumer spending in both North America and China, although it's still too soon to tell."

Three-quarters of the consumer executives surveyed report that they anticipate an increase in consumer spending in their target markets and in their own companies' financial performance in 2011 compared to 2010.

"The management discipline that consumer businesses adopted throughout the downturn made many of them leaner and more efficient, creating a stronger base from which to pursue success," says Kruh.

Sixty-four per cent believe that the situations in Japan and the Middle East will have little or no impact on their business operations in the long term, although for the Asia-Pacific specifically, 80% of all respondents expect a sustained impact on economic growth over the next six to 12 months. Respondents worldwide were most likely to see energy price volatility as the most enduring impact of these crises, as 51% of respondents anticipate a short-term impact on energy price volatility and 40% see a long-term impact.

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