Two out of three FMCG companies expect profits in 2023
2023 is expected to be profitable for more than half of the companies in the retail trade and the FMCGs industry, despite this year’s multiple challenges and difficulties, as reflected in the six-monthly rolling trend survey in the FMCG retail trade of the Consumer Goods Retail Research Institute (IELKA), which records the opinions of business executives in the industry.
Friday, September 15, 2023
In particular, in response to a related question, 56% of executives estimate that the financial result of their business in 2023 will be better than in 2022, while only 18% see a worse financial result this year. A further 15% predict an unchanged financial result in relation to 2022, while an 11% refrain from making predictions. Accordingly, 64% of businesses predict that they will make profits (indeed 39% say that profits will be more than 2%), against 10% that predict losses (half of them see losses of more than 2%), while a 20% avoid making predictions.
The factors that affect the prices upwards
An interesting element of the research is the estimates of the market executives on the factors that increase the prices this year. International raw material prices and energy costs emerge as the most important factor, quite reasonably, with 98% and 94% respectively of executives reporting that they affect prices a lot or very much. Transport costs (85%), the war in Ukraine (74%), speculation (48%) and elections (40%) also score high. Factors that are even lower are indirect taxes (30%), state legislation (30%) and the costs of the pandemic (18%).
Nevertheless, the vast majority of companies in the sector (98%) have proceeded to absorb part of the price increases, with 32% having absorbed up to 10% of the increase, 33% from 10 to 25%, 25% from 25 to 50%, and the remaining 10% from 50% and above.
They see an increase in sector sales in the second half
In relation to the expectations for the course of the sector’s sales, there is a large percentage of respondents (80%) who believe that the value of the sector’s sales will increase in the next six months, with a small percentage of 4% who believe that it will show a decrease. On average, the executives surveyed estimate a 3.2% increase in sales in the second half of 2023. In contrast, executives estimate a decline in sales volume in the second half of 2023 (-1.1%) to compared to the equivalent of 2022, due to inflationary pressures that negatively affect consumption habits.
Source: Food Reporter #01019/2023-09-13