Episode 25: 2021 Retail CFO Outlook: Responding to Demand Shifts

Announcer: Welcome to this episode of “60-second Retail” - a BDO podcast keeping you in-the-know on events and trends in retail and consumer products industry impacting your bottom line, in just a few short minutes.

Natalie: Hello, my name is Natalie Kotlyar. I am the National Leader of the Retail and Consumer Products industry group at BDO USA. In this episode, we are speaking with Jennifer Valdivia, Assurance Partner and West Region Leader, at BDO USA to discuss more findings coming out of BDO’s CFO Outlook Survey around how retailers are responding to consumer demand shifts. Our survey collects perspectives of CFO’s on their top challenges, issues, priorities and focus areas for the coming year, and we publish these results on our website. Welcome Jennifer.

Jennifer: Hi Natalie. Thanks for having me.

Natalie: What did the survey find as the top business risks for retailers? 

Jennifer: So I'm going to summarize the top business risk in a second, but frankly, I think all of these are pretty real business risks for all CFO's across the board. But in order, the top business risks were: declining product demand, keeping up with increased product demand, which is really the opposite of the first one, liquidity and access to capital, supply chain disruption, and workplace safety.

Natalie: So those all make a lot of sense and tell me, as a result of the pandemic, do you think any of these risks have shifted in priority for retailers today?

Jennifer: So supply chain disruption was certainly on the minds of CFO's in prior years, as tariffs have been a hot topic over the past couple of years and now couple that with the sheer availability of products - it has just compounded the risk with the pandemic.

So I think, really this goes hand-in-hand with being able to keep up with increased product demand and in some cases, you know that challenge both from a supply chain perspective and logistics perspective, as well as, really just sheer manpower perspective.

Another shift really that's come to the forefront, is workplace safety. Certainly, everyone can agree that workplace safety is a concern within an organization. But the pandemic has taken this concept to a much higher level. Many retailers you know, especially those who are in the grocery sector, are paying a premium through bonuses and higher base wages in order to keep the business operating.

However, you know, without proper protocols in place, an outbreak within a warehouse or retail location, can not only disrupt operations, but it can destroy a brand image.

And finally, a CFO, again is always concerned with access to capital. We saw this when retailers drew upon their otherwise untapped credit lines at the start of the widespread store closures back in March.

No CFO or company wants to feel powerless to keep their company afloat. While the government lent a lifeline to some companies who were able to qualify for stimulus packages, it really left others filing for bankruptcy with the capital markets tightening their purse strings.

All in all, you know these business risks are probably not new, but the pandemic really has enhanced the issues that surround each of these topics.

Natalie: Absolutely. Thank you for sharing those insights with us Jennifer, and I look forward to speaking with you on future podcasts.
Announcer: And that concludes this episode of BDO’s “60-second Retail” podcast.  Don’t forget to tune in for the next episode! To find more information on our hosts, guests, BDO’s services, or listen to previous episodes of “60-second Retail”, please visit www.bdo.com/60-second-retail.



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