Retail Leaders Preview 2024 Strategies

Prioritizing their workforce, adjusting pricing strategies and betting on generative AI are top of mind.
Danielle Romano
Managing Editor
Deli employees for Pilot Co.

NATIONAL REPORT — Retail chief financial officers (CFOs) have a positive outlook for 2024, but their expectations are in response to fixed consumer budgets and inflation.

While 40% of CFOs anticipate profit growth between 10% to 25% in the year ahead, their paths to profitability vary, according BDO's "2024 CFO Outlook Survey." Some, for example, are adjusting their pricing strategy, while others are leveraging scenario modeling technology to improve supply chain operations, as Convenience Store News' sister publication Chain Store Age reported

Key takeaways of the survey include:

  • Price increases lie ahead: Seventy percent of CFOs plan to raise prices again this year, though the majority say those increases will be slight as opposed to significant.
  • Retailers are tired of inventory inaccuracy: To help better forecast inventory needs, retailers turn to technology, with 55% planning to deploy scenario modeling and predictive software this year.
  • Retail CFOs look to maximize talent: Fifty-two percent of CFOs plan to pursue more upskilling or reskilling opportunities for their employees, which is, at least partly, to create data-driven models around customers, products and experience.
  • Retailers are bullish on generative artificial intelligence (AI): Forty-five percent say they are building a proprietary generative AI platform. While the greatest opportunities are still being uncovered, CFOs expect it to support all areas of their business including compliance, customer service and safety monitoring.

To navigate the year ahead, retailers should diversify their tactics, according to BDO. The firm offered the following recommendations:

[Read more: CSN EXCLUSIVE: Zeroing In on C-store Technology Priorities for 2024]

  • Use data to drive discounts: Promotional strategies can significantly impact profit margins. CFOs should use AI tools to be deliberate about the timing of discounts, in concert with planned price hikes, to maximize sales and compete with discount retailers. This will be critical as consumers continue to hunt for discounts, forcing retailers to adjust, BDO said.
  • Have open communication with lenders: Communicate financing plans to lenders and be forthcoming about any signals of distress early on to build credibility and trust. This may help to secure more favorable terms in the future and is especially true for those taking on additional debt.
  • Don't ignore the store: Relocation is an important real estate strategy to be closer to target consumers, particularly as many customers still work from home and no longer commute from dense areas, where larger format locations may primarily be.
  • Prioritize supply chain improvements: While retailers are likely to be limited when it comes to spending, increasing warehouse operation efficiencies and improving inventory management could be worthwhile investments. Leveraging predictive analytics can greatly help organizations pick SKUs that sell.

The 2024 Retail CFO Outlook Survey polled 100 retail CFOs from companies with revenues ranging from $250 million to $3 billion or more in October 2023. The survey was conducted by Rabin Roberts Research, an independent marketing research firm, using Op4G's panel of executives.

Chicago-based BDO delivers assurance, tax and financial advisory services that are tailored to clients' industry, unique needs and goals.

Chain Store Age and Convenience Store News are properties of EnsembleIQ.

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