Will companies exercise caution or use this opportunity to optimize?

In a reversal from Q4, increases in inventory levels across most sectors, except Food and Beverage, coupled with decreases in inventory turns, suggests a potential softening in consumer demand. This often prompts companies to reassess their product lines and focus on high-margin offerings to maintain profitability.

Latest quarterly readings in the Purchasing Manager's Index (PMI) further supports the notion of a cautious economic outlook, however domestic freight rates and oil prices remained stable QoQ alleviating inflationary pressure and offsetting margin pressures.

While the current signs suggest caution, they also offer an opportunity for companies to optimize operations and position themselves for long-term success. Is the concern warranted, or is there an opportunity?

On a monthly basis, AlixPartners charts sales, sentiment and supply chains in consumer-facing businesses. Learn more about the Consumer Products Corner newsletter and read previous articles, here.