Latest news with #consumerbehavior
Forbes
2 days ago
- Business
- Forbes
Stock Market: Companies Are Struggling With Inflation-Driven Consumers
Inflation has altered consumers' buying habits Year-to-year inflation may look low, but prices continue to compound upwards. For example, "Food at home" pricing, accounting for 8% of the total CPI basket, was up 1.8% in 2024. That seemingly low inflation rate nevertheless pushed up the Covid period price inflation to 27.6%, and that is what consumers are contending with. So, why is that a problem for companies? Because consumers' actions to reduce the inflationary effects can adversely affect business revenues and profits. Grocery shopping is a good example. Here are examples of what consumers can do: These actions not only affect the grocery stores, but also affect the companies that produce packaged food. The effect is measured by 'volume/mix' changes caused by consumers' altered decisions. In last year's 2023 annual reporting, Kraft's management anticipated 2024 growth from rises in both sales and prices. However, consumers tripped up the company's strategies and expectations. From the 2024 Annual Report: Note the higher pricing was well below the 2024 CPI inflation rate of almost 3%. So, how did Wall Street view Kraft's 2024 results and plans? Not well. Below is the stock's performance for the Covid-period. Note that the company (and others like it) was able to produce inflation-beating results early, but then the consumer actions began to hit, causing a reversal of the previous gains. With the consumer shifts continuing to hit results in 2025, the stock has now fallen below the cumulative inflation, making the Covid-period "real" (inflation-adjusted) stock performance negative. Kraft Heinz Covid-period stock performance (including dividends) now below cumulative CPI While the Federal Reserve focuses on the latest 12-month change in prices, it is the cumulative inflation damage that consumers focus on. After all, a "good" 12-month inflation change of 'only' 3% nevertheless compounds high prices even higher. The Covid-period rise is now about 23%. That level of inflation continues to cause damage, particularly in this period of high uncertainty (see "Uncertainties Are Churning U.S. Stock Market Outlooks" for explanation of why uncertainty can be more troublesome than risk). Here are the S&P 500's nine companies in the sector/industry combination of the normally safe consumer defensive/ packaged foods. They all got an inflation boost early but are now struggling with both higher costs and changing consumer buying actions. The weak and negative "real" (inflation-adjusted) total returns for the Covid period show Wall Street's bearish views of the situation and the outlook. Double-digit negative real performance shows inflation's continuing problems In the early 1970s when inflation was a similar concern, I read an interview with a wealthy individual. He made a surprising statement, saying he would happily give up half his wealth if the other half was guaranteed to retain its value. Why was he willing to make such a large payout? Because inflation has a potentially destructive power that can become self-sustaining, even as economic, business, and financial conditions deteriorate. It is what happened in the late 1970s and early 1980s.
Independent Singapore
2 days ago
- Business
- Independent Singapore
Cracking the code: How the insurance industry can win over Gen Z
As Gen Z, those born between 1997 and 2012, enter maturity, it's restructuring industries worldwide. Branded for their tech eloquence, realistic financial behaviours, and social cognisance and responsiveness, this generation has become the most dominant consumer group. However, despite their expanding economic leverage, there is one industry that's struggling to connect with them—insurance. Many studies expose a conspicuous gap between Gen Z and those within the insurance industry. With Gen Z's acceptance rates and deep-seated cynicism, it's obvious that the conventional approach is not working. However, this challenge also presents a significant opportunity if the industry is prepared to adapt and evolve. A generation largely uninsured According to a 2024 study by the National Association of Insurance Commissioners (NAIC) featured in a recent article from Finance Yahoo, less than 21% of Gen Z adults have renters' insurance. The numbers decrease even further with other major products—only 5% have contents insurance, 24% have life insurance, and 30% have travel insurance. This gap is not merely because of indifference. Since Gen Z individuals are evolving in an environment fraught with economic uncertainties, grappling with rising housing costs, student loan debts, and a volatile job market, insurance becomes a distant concern, a luxury they're considering getting 'someday.' Trust gap and why traditional insurance falls flat Gen Z's unwillingness also came from a profound distrust of legacy financial organisations. Having matured during economic recessions and amid online half-truths, many view underwriters as multifaceted, profit-driven individuals who are difficult to deal with and even harder to trust. There is also a prevalent opinion that insurance is something you need later, once you have a loan, start a family, or develop health problems. Until then, it's easy to depend on the mentality of 'I'll deal with it if something happens.' As a consequence, many Gen Z-ers either postpone insurance decisions or completely disregard them. Bridging the gap with education and digital innovation Approximately two-thirds of Gen Z mention a lack of knowledge and understanding about getting insurance. Likewise, trust is a key barrier to buying one. Even more disturbing, 48.1% of them say that they never think about insurance at all or assume it's already covered in the apps and services they're using. See also Guide to Health Insurance Plans in Singapore (2023) To alter these scenarios, insurance providers must meet Gen Z where they are—online. Affiliating with content makers on platforms such as Instagram, TikTok, and YouTube could help clarify and interpret the fine print. Quick, relevant videos on topics such as how deductibles work or why renters' insurance is important can have a huge influence. Simplify, digitise, and humanise Gen Zers are not anti-insurance—they merely can't see themselves in the way it's presently promoted or designed. With low homeownership rates, economic setbacks, and a preference for speedy, user-friendly digital solutions, they need insurance that feels relevant, accessible, manageable, and reliable. The industry has a fundamental choice to make—continue with 'business as usual,' or advance and transform into a space that speaks directly to this generation. This is not just about transforming a brand; it's a call for an in-depth modification, one that streamlines, digitises, and, most significantly, personalises how insurance is made available.
Forbes
2 days ago
- Business
- Forbes
The Surprising Ways AI Is Reshaping Your Favorite Brands
Your favorite snack didn't end up on that shelf by accident. Neither did the perfect shade of lipstick or the limited-edition cold brew flavor you didn't know you needed until you saw it. Behind it all? AI. Consumer packaged goods (CPG) brands aren't just experimenting with AI. The forward leaning ones are rebuilding themselves with it. Shopper behaviors are shifting fast. Supply chains? Fragile. Attention spans? Shorter than ever. To keep up, CPG brands aren't tweaking around the edges. They're using AI to enhance everything from how products are imagined to how they're delivered, priced, and personalized. AI is fueling margin growth, streamlining operations, and reshaping how brands connect with customers. AI is in product development. It's powering how factories run. It's optimizing supply chain operations. It's in the algorithms behind pricing. It's in the tone of that personalized ad you just scrolled past. AI is fundamentally changing the way brands create, compete, and connect and sometimes in surprising and unexpected ways. AI is helping CPG brands build smarter, sell faster, and waste less. AI tools are able to look at large amounts of data quickly and help humans make better predictions and data-driven decisions. By scanning massive datasets including everything from consumer preferences, emerging trends, or suggested ingredient combinations, AI doesn't just identify what's popular now. It predicts what's next. Formulations that once took months to create can now be simulated in minutes. AI fine-tunes everything from flavor profiles to packaging appeal, helping brands launch with precision, not guesswork. But it's not just about what gets made. AI is overhauling demand forecasting by analyzing historical sales data, market shifts, and even weather patterns. The result? Leaner inventories, less waste, and products that show up right where and when customers expect them. Figuring out the right price for goods has long been a moving target, that used to come down to best guesses and luck trying to perfectly match supply with demand. Now, AI is able to track multiple data points in real time from real-time fluctuations in demand, competitor pricing, and consumer behavior. CPG brands can now adjust prices dynamically to boost revenue and stay competitive without missing a beat. Behind the scenes, AI is rebuilding how CPG products get made and moved. AI tools are able to help predict when there might be spikes in demand. AI tools are able to map the fastest, most efficient delivery routes. They can also spot potential bottlenecks in supply chains before they become major issues. With AI analyzing data across suppliers, factories, and retailers, the entire supply chain becomes leaner and faster. Shipping delays? Cut. Fuel costs? Trimmed. Inside the plant, AI-powered computer vision systems are able to catch things that human eyes often miss. Everything from misplaced labels, inconsistencies, contamination risks, or imperfections in products are now able to be caught and corrected in real time. Quality control isn't just better. It's smarter. Then there's sustainability. AI doesn't just help companies say they're green—it shows them how. It uncovers where resources are wasted. It provides recommendations on how to cut excess packaging. It recommends where energy usage can be reduced. These small tweaks across many areas of operations can have big impacts. For CPG manufacturers, AI isn't just a tech upgrade. It's the engine behind cleaner, faster, more resilient operations. AI doesn't just shape what's made or how it's shipped. It's also changing how brands talk to, engage with, and respond to customers. By analysing customer data such as browsing habits, purchase histories, and demographic data, AI turns guesswork into precision. Promotions can now feel timely. Product recommendations feel intuitive. And content feels more personal, because it is. Across channels and various touchpoints, AI helps brands meet customers where they are, with the right message, at the right time, with what they actually want. But engagement isn't just about outreach. It's about awareness. AI tools are able to scan reviews, social media posts, and feedback loops to gauge real-time sentiment. Are customers excited? Confused? Losing trust? Brands no longer need to wait for quarterly reports. AI surfaces patterns fast, flagging risks and revealing opportunities in real time allowing brands to react immediately. CPG brands are also increasingly using chatbots and virtual agents for customer support help. AI-powered bots are able to answer frequently asked questions, resolve order questions, and diffuse complaints before they escalate. They're fast, friendly, consistent, and always on. When AI handles the routine, human teams can focus on the more complex and nuanced inquiries. AI is being shown to provide quicker resolutions to customer questions and problems, help with customer service agent burnout, and improve the overall experience on both sides. Even in physical stores, AI is showing its value. AI can decipher foot traffic patterns, optimize shelf placement of different products, and fine-tune promotions based on real-world behavior allowing for better product placement and visibility, smarter merchandising, and ultimately driving more sales. The future of CPG isn't just efficient. It's responsive. Adaptive. Personalized at scale. AI makes this future possible at scale.
Associated Press
3 days ago
- Business
- Associated Press
Specialist Hospitality Sector Accountants, James Todd & Co, Share Advice for Businesses Hit By Revenue Uncertainty
05/29/2025, Chichester PO20 2EW // KISS PR Brand Story PressWire // James Todd & Co, a respected accountancy group with experts focused on the hospitality sector, has offered some guidance for businesses in the industry, following a tumultuous few months where revenues have fluctuated considerably, and in contrast to the general GDP trends. The latest UK GDP figures, published by the Office for National Statistics (ONS) provided long-awaited relief reflecting a small margin of growth of 0.2% in March 2025, which compares to 0.5% in February and a contraction of 0.1% in January. While improvements in services spending have played an important role, the firm notes that the levels of apprehension currently present require agility and robust financial planning. Why Hospitality Sector Businesses Are Struggling With Uncertainties Over the Future Last year was a significant challenge for many hospitality businesses. Sharp rises in operating costs, high inflation levels, and consumer caution meant that a large proportion of organisations found it challenging to remain profitable. A reported 42% of consumers indicated last year that they intended to reduce spending on dining out, which increased to 46% for 2025. While interest rates have now stabilised to some extent, the 8.5% increase in staffing overheads introduced in the Autumn Budget has painted an uneasy picture for the months ahead. Given the sector's dependency on discretionary spending, record-high utility prices and dips in consumer confidence have had a greater direct impact on the hospitality sector than in many other areas. This culminated in a 2.4% fall in trade in January, far underperforming against overall GDP, which shrank by 0.1%. Although the most recent data shows a more positive outlook, with modest GDP growth largely attributed to services industries, concerns remain. These are particularly relevant following a year when like-for-like sales only occasionally reached above inflation levels and when thousands of hospitality companies closed their doors in just the last quarter—a closure rate of eight businesses or venues a day. In this climate, James Todd & Co has advised that in-built contingency planning, accurate short and long-term forecasting, and continual oversight of cost pressures, profitability, and reserves are crucial. This gives hospitality sector clients the flexibility to adapt and respond to changes while focusing on commercial sustainability. Targeted Guidance for Hospitality Business Owners in 2025 Michelle Buzzard, FCA, Partner at James Todd & Co said, ' There's no doubt that it's been a tough couple of years for most hospitality businesses, and we've seen particular difficulties within economy-focused providers, as opposed to luxury services, who have been hit hardest by drops in consumer spending. It's also no surprise that the measures introduced in the Autumn Budget and Spring Statement seem to compound the challenge, with many owners already struggling to balance their books and looking for better ways to remain buoyant and liquid while dealing with higher costs and lower incomes. Our key advice for any company in this situation or with concerns over the viability of its trade over the year ahead is to seek expert advice sooner rather than later – which means they do not end up in a situation where the stress of uncertainty makes it all but impossible to focus on innovation and efficiency. Hospitality companies are no strangers to volatility, and most already manage seasonality. Many owners already know they need oversight of overheads and cash flows, to account for periods with typically lower incomes and ensure that reserves are allocated to cover outgoings between peak trading seasons. However, we've seen an increasing number of companies reach the point of crisis, where detailed, diligent financial planning, cost control measures, and budgeting before this point could have highlighted opportunities to restructure, introduce cash flow management strategies, or potentially source financing or capital investment.' Proactive Financial Management Recommendations for the Hospitality Sector Michelle goes on to say, ' Professional accounting isn't just about preparing retrospective accounts, but about giving our clients the tools and resources they need to effectively plan ahead and see barriers to growth before they arrive. We ensure businesses have the support necessary to create contingencies or look at changes to their trading models to adapt to fluctuating consumer trends. Ignoring an issue or hoping for the best is never advisable. We suggest that hospitality businesses with concerns or a lack of forecasting for the summer trading period contact our accountancy teams directly or arrange a convenient time to meet at our Chichester or Fareham offices.' James Todd & Co offers a comprehensive range of hospitality accounting and financial management services, including bookkeeping services, tax planning, VAT reporting, and general accounting expertise. The company also offers bespoke coaching services through its Goals to Growth programme. Read more about James Todd & Co - Accomplished Charity Accountants at James Todd & Co Comment on Calls for New Exemptions and Allowances About James Todd & Co James Todd & Co have been providing accounting services for more than 30 years across Chichester, Fareham, and Portsmouth for businesses across the South East. Their clients trust them to provide bookkeeping, financial auditing and compliance, management accounting and financial advisory services. Media Contact: Oliver Read James Todd & Co 01243 776938
Reuters
3 days ago
- Business
- Reuters
Australia retail sales dip 0.1% in April, miss forecasts
SYDNEY, May 30 (Reuters) - Australian retail sales dipped unexpectedly in April as warm weather hit spending on winter clothing, while department stores suffered from a dearth of discounting events in further evidence of a subdued consumer. Data out from the Australian Bureau of Statistics (ABS) on Friday showed retail sales fell 0.1% in April from March, when they edged up 0.3%. The outcome was well short of market forecasts of a 0.3% increase. Sales of A$37.2 billion were up 3.8% on a year earlier, a slowdown from 4.3% in March and historically sluggish given annual population growth is running around 1.7%.
