Cautious consumer-facing companies anticipate episodic recovery

Consumer markets findings from PwC’s COVID-19 CFO Pulse Survey

Consumer-facing companies have been among the hardest hit, as mandated stay-at-home orders — combined with economic uncertainty — have brought consumer spending to a halt for all but essential products and services. It’s no surprise then that in PwC’s COVID-19 US CFO Pulse Survey, consumer markets (CM) CFOs report a higher level of concern than their peers in other industries, with 83% citing significant impact causing great concern, versus 74% in sectors overall.

Business as usual will take a lot longer

33% of consumer markets CFOs say they expect it will take 6 months or more, compared to 18% across all sectors.

If COVID-19 were to end today, how long would you estimate it would take for your company to get back to business as usual?

Consumer markets respondents
Total US respondents
%
%
%
%
%
%
%
%
%
%
Less than a month
1 to 3 months
3 to 6 months
6 to 12 months
More than 12 months
33%
Source: PwC COVID-19 US CFO Pulse Survey
April 8, 2020: Total base of 313; CM base of 46

Decrease in consumer confidence is a top-three concern

More CM CFOs (50%) said reduced spending resulting from a decrease in consumer confidence is a top-three concern, versus 39% in all sectors. Supply chain disruption is also top of mind for CM CFOs: 37% versus 21% for all sectors.

What are your top 3 concerns with respect to COVID-19? (Select up to three.)*

Consumer markets respondents
Total US respondents

Financial impact including effects on results of operations, future periods, and liquidity and capital resources
%
%
Potential global recession
%
%
Decrease in consumer confidence reducing consumption
%
%
The effects on our workforce/reduction in productivity
%
%
Supply chain disruptions
%
%
*Highest-ranked choices from a list of 12 options.
Source: PwC COVID-19 US CFO Pulse Survey
April 8, 2020: Total base of 313; CM base of 46

Workforce challenges unlike any other industry

Consumer-facing companies run the gamut from consumer-packaged goods and retail to travel, hospitality and transportation. As consumers self-quarantine, some CM industry products and services are deemed essential and are in great demand, while there’s almost a complete lack of demand for others.  As a result, some subsectors are rapidly ramping up their workforce, while others are considering temporary furloughs or permanent layoffs.

As a result of COVID-19, which of the following does your company expect to occur in the next month?

Consumer markets respondents
Total US respondents
%
%
%
%
%
%
Insufficient staffing to accomplish critical work (workforce capacity)
A change in staffing due to low/slow demand (temporary furloughs)
Separation of staff (layoffs)
Source: PwC COVID-19 US CFO Pulse Survey
April 8, 2020: Total base of 313; CM base of 46

CARES Act provides welcome economic relief

CM CFOs are more likely to take advantage of government programs such as the CARES Act (63%), versus 49% across all sectors.

Which of the following is your company planning on or considering taking advantage of? (Select all that apply.)*

Consumer markets respondents
Total US respondents

Tax payment deferral or extension of deadlines
%
%
Other tax provisions (e.g., modifications to net operating loss limits, temporary amnesty if taxes are overdue)
%
%
Loans and/or loan guarantees
%
%
Subsidies or reduction of government fees
%
%
Flexible benefits for employees as a result of mandatory reduced hours, furloughs or lay offs
%
%
*Highest-ranked choices from a list of 9 options.
Source: PwC COVID-19 US CFO Pulse Survey
April 8, 2020: Total base of 152; CM base of 29

The way forward

Companies already prepared for digital disruption are in a much better position to handle the sudden, sharp shock of COVID-19, as consumers migrate online in an effort to shelter in place. This trend is expected to have lasting effects, necessitating business model transformation to stay relevant and meet consumers where they want to be: online.

 

Contact us

Steve Barr

Consumer Markets Leader, PwC US

Eric Shin

Consumer Markets Tax Leader, PwC US

Ron Kinghorn

Principal, PwC US

Melissa Palmer

Consumer Markets Assurance Leader, PwC US