KPMG helps clients deliver top and bottom line growth in a time of disruption. This box/component contains JavaScript that is needed on this page. Even though nominal average weekly earnings have increased by 8.3% since December 2020, real earnings have fallen by 5%. Consumer & retail: Digital disruptors - KPMG Retailers should look to take advantage of in-store reverse logistics capabilities. National Sector Leader, Consumer & Retail, KPMG LLP, National Advisory Leader, Consumer & Retail, KPMG US, National Consulting Leader, Consumer &Retail, KPMG LLP, Deal Advisory Leader, Consumer & Retail, KPMG US, Partner, National Audit Industry Leader, Retail, KPMG US, Partner, National Audit Industry Leader, Consumer Goods, KPMG US, Partner, Consumer & Retail Tax Leader, KPMG US, National Sales Leader, Consumer & Retail, KPMG US. Sherry Frey: Another question thats come up is specifically from medium-size brands wondering, What do we do? Steve Noble: One of the questions I found interesting is, This is great research, but the past five years have been pretty unique: a very strong economy, then the COVID-19 years, then some recovery from that. CAPITALAND RETAIL MANAGEMENT PTE LTD Legal Entity - The Grid Yes, CPG companies, but also retailers and other players involved in the sustainability space more broadly. Impacted areas of the consumer and retail deal market in 2021, Steady progress at differing clock speeds. Sherry Frey: In the research, we also found that theres higher consumer loyalty to the brands that have more ESG claims. 2 Christopher Rugaber, Federal Reserve sees interest rates near zero, at least through 2023, PBS News Hour, September 16, 2020; YCharts, US 5-year CD rate, accessed March 1, 2022. I'm really thrilled to be here. The M&A Environment: Where Is It Headed? | BMO Capital Markets Vinit Doshi: Its interesting that when weve looked at participation rates across categories, we dont always see that every major manufacturer is necessarily leading. Non-store retailing is the selling of goods and services outside the confines of a retail store, off the premises of fixed retail locations. Meanwhile, total consumer debt has hit a record $17 trillion in the first quarter this year, the New York Federal Reserve reported . Private equity is playing an ever-increasing role in the market. Areas of Expertise Apparel, Footwear & Accessories In fact, our recent NielsenIQ 2022 Consumer Outlook online survey reveals that 74% of global respondents believe that their priorities, and resulting shopping habits, have been . MFCs can increase storage capacity and throughput ratesfilling orders for multiple storesand create efficiencies by freeing up employees who otherwise would be picking orders. Improving business performance, turning risk and compliance into opportunities, developing strategies and enhancing value are at the core of what we do for leading organizations. Steve Noble: When we looked at the question of, Is this disproportionately driven by one or more demographic groups? the answer was generally no. The respondents included C-suite and senior executives who were directly responsible or exerted significant influence on major strategic initiatives in their organizations. Workers are valuing benefits almost as much as salary. B&M sees higher profit as Britons hunt for bargains | Reuters 2021 Consumer Retail M&A Report - Kearney Amid market volatility, labor pressures, and supply chain constraints, how can retailers sustain the resiliency of the last few years to better navigate the current headwinds? Connect with us via webcast, podcast, or in person at industry events. The results provide a unique outlook on how today's market, future expectations, and changing consumer needs inform strategies for the year aheadand beyond. Should companies hire new kinds of people? Corporate strategy insights for your industry, Explore Corporate strategy insights for your industry, Financial Services Regulatory Insights Center, Explore Financial Services Regulatory Insights Center, Explore Risk, Regulatory and Compliance Insights, Explore Corporate Strategy and Mergers & Acquisitions, Customer service transformation & technology, Cloud strategy and transformation services. I dont go to a companys website and I dont look at their ESG report. In Q321, we observed several major trends in C&R deal making: In this quarterly report we unpack the trends across each of the sectors as well as deep dives on key areas, including: Download the full report to uncover what is happening in these dynamic industries, how deals are being done todayand why. A busy sector suits many investors' tastes. Optimistic consumers plan for happier holidays. These KPMG reports help companies understand consumers, uncover the signals of permanent change and create a basis for transforming business to meet customer demands. A slowing economy will keep retail sales growth in check. That surprised me because we often see that theres a gap between peoples sentiment and stated intent versus their actual behavior. That doesnt mean every one of those products is going to drive incremental growth, but we believe that on average they will. No member firm has any authority to obligate or bind KPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. This means theyre effectively leaving opportunity to drive ESG-led impact on the table. When we closed the study and re-ran the data, tracking a core set of attributes around wellness, we were surprised because weve seen some trading down and lower penetration in attributes like organic, but we havent seen that in the sustainability attributes as a whole. E-retail consolidation, however, is likely to remain popular, boosting both portfolio and scale through M&A. To thrive in today's marketplace, one must never stop learning. As weve been sharing that with clients, its been resonating as a different way for a company to measure how theyre best serving consumers. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. and have nots. Consumer & Retail M&A Transactions | Capstone Partners Competitive sales point to a confident market. 2023Copyright owned by one or more of the KPMG International entities. Explore Deloitte University like never before through a cinematic movie trailer and films of popular locations throughout Deloitte University. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. We went into the research with the hypothesis that it would be challenger brands, smaller brands, that would be driving the growth in sustainability. Consumer Investment Banking | Capstone Partners Perspectives from consumers and retail executives. Explore the benefits of an integrated system that combines warehouse management and warehouse control. What other questions are you digging into with regard to consumer goods and sustainability? Our belief is that this isnt about picking one product in one category and going big on it. With client centric, industry-focused advisory, taxand audit services, we work with clients to drive greater shareholder value, and embed and sustain positive change. Retail, Wholesale & Distribution Research Leader, Vice Chair & US Leader | Retail & Consumer Products, Telecommunications, Media & Entertainment, From ground-breaking to breaking ground: Walmart begins to scale market fulfillment centers, Happy Returns locations expand to over 5,000 with Ulta Beauty return bars, Holiday retail trends show spending is alive and well, Do Not Sell or Share My Personal Information. Fullwidth SCC. We spoke with Patricia Hong and Steff Paletta from Alvarez & Marsal's Consumer and Retail Group. The premise is that you have to be doing things more right; you have to be investing in sustainable products, organic products, fair-trade laborthe list goes on. There was a time when many people thought of a green product as a less effective product. Acquirers are investing in assets that are more healthy and sustainable and fit the work-from-home lifestyle. I dont think Ive yet had a conversation with a marketing leader; weve had conversations with R&D leaders, sustainability leaders, and overall corporate leaders. At Deloitte, our purpose is to make an impact that matters by creating trust and confidence in a more equitable society. The Consumer & Retail Group offers its domestic and international clients advice and execution on public offerings, private capital, leveraged finance, mergers & acquisitions, restructurings, and other financial advisory services, including fairness opinions. She has expertise in M&A Finance processes for Integrations & Divestitures, focusing on supporting CFOs and their lea More. 3Y Charts, US 5-Year CD Rate. KPMG Advisory Podcast Index page. It covered 600,000 SKUs in 32 CPG categories. Its not simply a marketing vehicle. We help consumer and retail companies, from small start-ups to large multinational operations, navigate the changing marketplace and improve top- and bottom-line results. Consumer & Retail - KPMG Its about a portfolio play. Im really thrilled to be here. Expect to see increased investment in functional, healthy beverages, consolidation of direct-to-consumer platforms. The star consumer & retail sector keeps rising. Financial buyers now account for half of all deals -- up 3 percent on 2020, with private equity (PE) investors particularly bullish. Wheres our opportunity? Through deep industry experience and market data, the KPMG Consumer & Retail practice produces timely industry content. At a Glance Consumer interest in rapid delivery of food, groceries, and other goods has risen dramatically since the beginning of pandemic lockdowns. Total global M&A volume, across all sectors, registered record growth, with C&R deal volume are enjoying a 20-year high. Modern direct selling includes sales made through one-on-one . An edited transcript of the conversation follows. Other questions are about the consumer, who is evolving so rapidly. And internet & catalog retail deals continued their upward march, growing 22 percent, led by a 29 percent increase in deals involving financial investors. A sustained wave of deal-making continues as consumer and retail companies remake their portfolio for a new reality, Holiday shopping report Retail executive outlook I September 2021. Overall, M&A is set to remain an integral part of home care players' expansion strategies in 2022. Being able to point to factual evidence, beyond consumer sentiment surveys, will be important. To maximize value, CEOs can borrow from the activists playbook. Vinit Doshi: Thank you so much, Monica. Retail customer Definition: 364 Samples | Law Insider Monica Toriello: Steve Noble is a senior partner based in McKinseys Minneapolis office. KPMG International provides no client services. Time to reset, reposition, and win - Kearney Consumers continue to prioritize sustainability, Companies confidently pursuing strategies focused on growth, efficiency and innovation, Consumer & Retail insights from the KPMG 2022 U.S. CEO Outlook survey, Eight priorities for audit committees to focus on, Executives have high hopes for growth, but value remains elusive. Here we offer our latest thinking and top-of-mind resources. This was five years of data, and it was the first time that we looked across not just hundreds of claims but also across brands of all sizes. It polled a sample of 50 retail industry executives, of which 70% were from companies with annual revenues of $10 billion or more. So far, we see some resilience, but will that hold up? Steve Noble: In an environment with lots of economic uncertaintyand the threat of a possible recession, do companies retrench a bit and say, As much as wed like to invest in sustainability, we just cant do it right now? Its not about hiring a bunch of people in function X, Y, or Z. Its about making sure youve got the right voices and the right facts at the table. Or is something else going on? Ill introduce them briefly. Do consumers pay attention to sustainability claims? With deal valuations still high and a potential recession on the horizon, consumer packaged goods companies need to do more than cut costs to drive transaction value. Great to be here with you all. Vinit has 25 years of experience in advanced analytics, focusing primarily on growth strategy in CPG [consumer packaged goods] and retail. KPMG helped Dawn Foods digitally evolve overnight. Publications: Consumer & Retail - KPMG Get the latest KPMG thought leadership directly to your individual personalized dashboard, Partner, Global Deal Advisory Consumer & Retail Lead, Global C&R M&A outlook 2022: Sector analysis, View Print friendly version of this article Opens in a new window. For more detail about the structure of the KPMG global organization please visithttps://home.kpmg/governance. We found that inflationary impacts arent affecting sustainability the way theyre affecting some of the other wellness-related characteristics. Capstone is the bank of choice for fast-growing entrepreneurs driving changes in the marketplace. All rights reserved. As a global pandemic, COVID-19 poses mind-boggling health and humanitarian challenges, and the economic impact on lives and livelihoods of the efforts to contain the virus is the strongest in a century. I was pleasantly surprised to see that private label was driving some of the outsize growth. After a difficult year under COVID-19, the luxury market recovered admirably in early 2021, resulting in a flurry of M&A activity as investors chased assets. We do know that theres a subset of consumers who are apathetic. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Consumer and retail M&A trends in Q3'21 - KPMG Consumer Products M&A | Bain & Company As retailers emerge from the pandemic, the consumer has changed; there are new faces of competition, increased margin pressures from the third-party ecosystem, and the standard product playbook no longer contains the formula to win. Another major trend is portfolio reshaping, to adapt to fast-changing consumer demands, and rationalize competition where companies are strongest. High supply chain costs make co-manufacturers more vulnerable to acquisition. Contact Insight Download PDF Kevin Martin Deal Advisory Leader, Consumer & Retail, KPMG US +1 571-635-4078 A continuing boom in e-commerce and store re-openings (despite the Delta outbreak) are driving a sustained wave of deal-making in the consumer and retail sector. Patricia is a Managing Director in the practice, and Steff heads up recruiting. Consumer goods companies that understand how risks interconnect will have greater resilience, drive value and increase stakeholder trust. Good to have you here, Vinit. Our multi-disciplinary approach and deep, practical industry knowledge, skills and capabilities help our clients meet challenges and respond to opportunities. He said theyd tracked a series of sustainability attributes on a set of products, and those product cohorts continued to grow quarter over quarter through the financial crisis and that recessionary period, even as the overall business struggled. Human resources executives take on the challenge of managing in the new reality. Theyre also predicting hard times for consumers, with nearly all anticipating diminished consumption in 2023, resulting from rising financial concerns. Our multi-disciplinary approach and deep, practical industry knowledge, skills and capabilities help our clients meet challenges and respond to opportunities. While uncertainty over COVID-19 remains, we expect investments to continue to rally in a market that has adapted to pandemic conditions and is prepared for any surge in variant virus cases. PE firms are expected to stay bullish about consumer sector prospects, focusing on companies that navigated the choppy waters of COVID-19 and emerged in strong Shape. So they really are starting to tie this all together. Fashion is the most popular online shopping category by global retail e-commerce sales, and it's expected to reach $990 billion in 2023. Thats another area of opportunity for brands. What were the most significant impacts in the consumer and retail deal market in 2021? Cultivating a sustainable and prosperous future, Real-world client stories of purpose and impact, Key opportunities, trends, and challenges, Go straight to smart with daily updates on your mobile device, See what's happening this week and the impact on your business. Environmental, social and governance (ESG) has become an ever bigger driver, whether it's healthy eating, plant-based ingredients, sustainable supply chains or ethical workforce practices. The price piece is an interesting complement to what weve already shared, and further reason to believe that theres opportunity to invest in sustainability attributes more broadly. Thats the first step. Retail M&A | Bain & Company Consumer & Retail - KPMG 9Consumer spending in this section refers to real spending and not nominal unless mentioned otherwise. This report gives fact-based information that shows there is a business case. The year ahead looks promising for supermarket chain M&A, as multiple players seek to change ownership, and PEs take a growing interest in the sector. KPMG and Microsoft helped Simply Good Foods meet the challenge of completing a merger and launching new ERP software at the same time. Based on 6 documents. After an outstanding 2020, home care M&A returned to normal levels in 2021, with a decline of 19 percent in deal volume. Retail as we know it is over. Our analysis has identified three macro trends both buy-side and sell-side retailers can take advantage of through M&A and margin improvement strategies to accelerate growth and stay ahead of the competition. Understanding whats happening with those claims in other categories can be a lens into what the future might look like. We know that consumers are saying, I want it on the package; thats where I learn about a brand. We help consumer and retail companies, from small start-ups to large multinational operations, navigate the changing marketplace and improve top- and bottom-line results. SPACs have lost their luster among investors in C&R, declining to just four deals in Q321, compared with 10 deals in 1Q21. Vinit Doshi: One of the big questions were asked is about price premiums. E-retail consolidation, however, is likely to remain popular, boosting both portfolio and scale through M&A. M&A is strong, as buyers aim to consolidate a fragmented market, expand product and channel offerings, and help smaller players accelerate growth. Today, well hear from three authors of the report. High supply chain costs make co-manufacturers more vulnerable to acquisition. Consumer deals riding a high tide - KPMG Global In response to supply chain disruption, companies are protecting the core business and spinning-off/carving-out non-core assets and niche brands offering opportunities for acquirers. Expect a robust M&A market driven by personalization, environmental sustainability and innovation. CAPITALAND RETAIL MANAGEMENT PTE LTD. is ACRA-registered entity that has been operating for 31 years 1 month in Singapore since its incorporation in 1992.. Officially, . Data from the Australian Bureau of Statistics on Wednesday showed its monthly consumer price index (CPI) rose 6.8% in the year to April, compared with 6.3% in the previous month and market . Big staff cuts can be self-defeating. Consumers continue to prioritize sustainability. Consumer optimism is strong with travel and experienced-based spend up double digits. PE investors remain confident about consumer sector prospects, honing in on companies that have successfully rode out the COVID-19 storm. Monica Toriello: To what do you attribute this continued spending on sustainability? It doesnt have to be a nine-month project. To check the pulse of retail executives, we asked 50 leaders about their expectations regarding challenges and opportunities in the upcoming year. Spending shifts due to COVID-19 have widened the divide between digital haves When it became clear that consumer purchasing was altered by the pandemic, these proactive players with agile delivery models and enhanced digital capabilities thrived. We call it total wellness because weve found that the consumer is merging how theyre thinking about their personal health and wellness, the health of the planet, and social responsibility, or the health of others. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. In this episode of the McKinsey on Consumer and Retail podcast, three authors of the report discuss highlights from their research. Elderly being 'snubbed' by M&S with new digital cafes - The Telegraph