Mid-market retailers optimistic about growth in 2024

Executives and C-suite professionals at mid-market retail and consumer packaged goods companies are nearly universally optimistic about 2024, with few anticipating a recession. 

Most (90%) executives expect their sales to remain the same or increase in 2024, according to a survey sponsored by investment bank Carl Marks Advisors. The survey respondents were executives and C-suite professionals at middle-market retail and CPG companies with annual revenues between $25 million and $300 million.

Having absorbed the shocks of the COVID-19 pandemic and subsequent inventory challenges, retail executives remain focused on fine-tuning their supply chains and taking advantage of the latest tools and strategies for mitigating future turbulence, the survey found.  More than half of respondents plan to diversify their supplier base (53%), while a substantial percentage plan to increase onshoring (46%), invest more in supply chain technology (44%) and increase automation (43%).

Most retailers are looking for ways to evolve how they show up in the marketplace, with most either planning to open new storefronts (96%) or close existing locations (89%). A minority of respondents said they would invest in more employees (35%) or customer service (39%).

Other key findings from the survey are below.

• AI Will Impact All Aspects of Retail: More than half of respondents plan to invest in AI to support their marketing (56%) and financial forecasting (52%), and fewer than 1% reported no AI investment strategy for the coming year.
• Widespread Optimism: Less than 10% of respondents expect sales to decrease year-over-year. In 2024, just 38% of respondents believe rising inflation will impact supply chain investments.
• Supply Chain Evolution: Fewer than 1% of respondents say they plan on taking no actions to evolve their supplier chain.
• Customer Experience Innovation: Retailers are prioritizing simple and efficient transaction processes and payment options to enhance the experience of their customers, with 37.2% of respondents investing in buy now, pay later programs and 35.6% focusing on implementing same-day delivery options.

“With inflation abating and interest rates leveling off, 2024 presents an exciting opportunity for retailers with the courage to embrace out-of-the-box thinking and innovation,” said Howard Meitiner, managing director at Carl Marks Advisors. “Retailers who are prepared to re-evaluate their business model and take the necessary steps to invest in integrated omnichannel experiences should be optimistic about the coming year.” 

Following record lows in unemployment and a strong holiday season for retailers, now is not the time to be pessimistic, advised Meitiner. 

“Companies willing to risk trying something different – whether a new strategic partnership or sourcing on-shore – will be rewarded in 2024,” he said. 

Carl Marks Advisors sponsored the online survey from Oct. 26-Nov. 10, 2023. In total, 250 responses were collected from executives and C-suite professionals at middle-market retail and CPG companies with annual revenues between $25 million and $300 million.