KPMG: 4 out of 5 managers are preparing for a price increase, but they are also struggling to maintain profitability with other means

By: Trademagazin Date: 2022. 09. 07. 09:30

In the near future, more than four-fifths of the companies are preparing for price increases that reach or exceed the level of inflation – if they have not yet exceeded this. Inflationary pressures are forcing managers to scrutinize the business model. About 60 percent of companies are trying to develop new, cheaper products, and almost half are preparing for downsizing. In the KPMG Inflation Survey, he looked for the answer to how companies try to minimize the impact of inflation on their results, what they do to increase revenues, and how they prepare for unexpected challenges.

According to KPMG research, companies are trying to offset the effects of inflation with price increases, downsizing, and remote work

The companies barely had time to recover, they were just starting to recover from the situation caused by the pandemic, when the new difficulty arrived. The war in Ukraine brought geopolitical risks to business not seen in many years, aggravated disruptions in supply chains and shook the energy market. Due to slowing economic growth and the threat of recession, the outlook for the future is rather dim. And what’s even worse: inflation in the United States has accelerated to a 40-year high, but inflation has not been this high in Hungary for 24 years either, and decision-makers have been forced to raise interest rates several times.

In the current situation, in order to deal with the challenges, it is important for companies to review their business model, develop new strategies to accelerate growth, and mitigate damage in essential areas. Company managers are responding to the challenges with a number of measures, trying to be flexible in order to get through this period and counterbalance the impact of increasing costs on the company’s operations and results.

As part of the KPMG Inflation Survey research, in May 2022, 300 finance managers were asked how they manage the effects of inflation, how price increases affect strategic decisions, and how they prepare for unforeseen external effects. The respondents talked about their plans for the coming weeks and months, about the extent to which the increasing costs will be passed on to consumers in parallel with the increase in inflation, or how wages will be handled at their company. It is also discussed whether they are developing their technology in the current situation, or whether they are rethinking their product portfolio.

KPMG