Thoughts on beauty contests and other things

László Flórián 
managing director
Rossmann Magyarország

We are still suffering from the supply chain disruption generated by the Covid pandemic, there is an energy crisis unfolding because of the war, the government has spent too much money recently, and it tries to compensate for this by levying special taxes and cutting the budgets in many fields – all of these make consumers anxious and spend less.

What shall we, managers do? If we cut back on our spending and reduce costs drastically, there will be no sales revenue. If we decide to invest, we can increase our market share considerably – but if the consumption crisis lasts too long, we might run out of resources. What if we basically do nothing, just increase prices as much as our costs are rising? There is risk in this as well, since shoppers won’t accept sky high prices if they don’t have enough money in their pockets.

My view is that the situation is still a little bit better than back in 2008, perhaps because shoppers also get to decide on their own fate, and not just the banks do it for them. Shoppers will consume less and choose what is cheaper. We managers will learn to find new directions, set new targets and write new strategies every day. It seems that beauty contest participants have been right all the time, when they said: the most important thing is world peace. //