Consumer and retail (C&R) companies were among the first to get hit by the impact of the sudden jump in inflation and rising expectations of an economic slowdown. With spiking gas and food prices taking thousands of dollars out of household budgets, consumers have been pulling back and switching to lower-cost options for six months.

In our recent Consumer Pulse Survey: Holiday 2022 Report, 85 percent of respondents said that they were somewhat concerned about inflation. As the critical fourth quarter gets underway, many consumer and retail businesses have more inventory than they need to fill weakening demand. This could create additional challenges for the C&R sector if, as we anticipate, the U.S. economy tips into a real recession n 2023.