Supply Chain Risk Doubles as Top Threat for Retail CEOs: KPMG

By Tom Whitfield

Forty-eight percent of consumer and retail CEOs identify supply chain resilience as a threat to growth over the next three years, according to the 2026 KPMG Global Consumer & Retail CEO Outlook. That figure is double the 24% cross-sector average and more than three times the 15% the same survey recorded in 2023. Supply chain resilience has now ranked as the sector's top growth threat for a second consecutive year, and consumer and retail leaders weigh the risk more heavily than CEOs in any other industry.

The concern is converting into budget. Forty-four percent of consumer and retail CEOs name supply chain resilience and operational continuity as an investment priority, against 25% across all sectors. Cybersecurity and digital risk resilience now commands the same 44% share, up from 29% in 2025, signaling that boards now fund disruption readiness across both physical and digital operations.

Isabelle Allen, global head of consumer, retail & leisure at KPMG International, said: "Supply chain resilience is no longer just about managing the physical movement of goods. Increasingly, it's about understanding and managing a company's individual position in their wider ecosystem of suppliers, partners and the interconnectedness of capabilities that businesses depend on."

Allen added that leaders who have built self-awareness of their position and anticipate where disruption may emerge will adapt more quickly and build resilience for long-term growth.

Does the sector still believe in growth?

Yes, and by a wider margin than most industries. Eighty-four percent of consumer and retail CEOs express confidence in their industry's growth prospects, slightly above the 81% cross-sector average. The share who are "very confident" rose from 26% to 37%, the highest of any surveyed industry and 14 percentage points above the cross-sector norm. Confidence in CEOs' own organizations climbed from 77% to 83%, while 82% report greater pressure to secure long-term prosperity, up from 76% last year.

Where is AI investment heading?

Toward fewer, sharper bets. Workflow AI integration investment fell year-on-year and now sits below the cross-sector average at 28% versus 32%. Yet 71% still call AI a top investment priority, up from 64% in 2025, which points to more targeted deployment rather than reduced ambition. Return expectations have also tempered: the share anticipating returns within the first year dropped from 16% to 11%, while those expecting returns within one to three years rose from 68% to 73%.

Implementation confidence is rising. Seventy-one percent believe their organizations move at the right pace or ahead of the curve on AI, compared with 66% across all sectors, and 80% agree their data is ready for safe AI integration, up from 64% in 2025. Fifty-four percent expect AI to move beyond recommendations and play a more active role across the purchasing journey.

Linda Ellett, head of consumer, retail & leisure at KPMG in the UK, said: "The traditional, linear customer journey has been obsolete for some time. But AI is adding a new, more playful and certainly more conversational and personalised experience, with consumers increasingly discovering, evaluating and purchasing through AI."

Ellett noted that trust and transparency become more critical as technology plays a greater role, and that the challenge for retailers is not simply adopting AI but being present where customers want to find and buy from them.

How are workforces adapting?

Concern about bridging the skills gap grew from 32% to 40%, versus 36% across sectors, and 72% say AI has made them rethink employee training and development, against 57% cross-sector. The concrete responses are:

• 82% are hiring talent with AI and technology capabilities, up from 60% in 2025
• 83% are redesigning roles and career paths, up from 73%
• 88% are focusing on retaining and retraining high-potential employees, up from 71%

What are CEOs doing about changing demand?

All surveyed consumer and retail CEOs report taking action on health-led shifts in consumer behavior. Sixty-six percent are adjusting product portfolios or category mix, 57% are increasing investment in health, wellness and lifestyle propositions, and 55% are adapting brand strategy and positioning. Customer experience remains the sector's leading operational priority for a second straight year, cited by 29% of respondents, up from 16% in 2025 and nearly double the 13% cross-sector share.

Allen framed the road ahead: "Beyond supply chain risk, AI and GLP-1s are two key areas of attention for the sector. Both have potentially significant implications for consumer behavior, business models and long-term growth, and both require company-specific responses." For marketing leaders, the practical task she sets is understanding where these developments create genuine value, what investment they require and how quickly they will pay off.