TauliaThe latest meeting of the Working Capital Forum saw treasury leaders from several major retail and FMCG firms gather around our Virtual Round Table. In a wide-ranging conversation, the group shared experiences of managing cash during the global pandemic and the unique pressures placed on them and their teams.  The catalyst for the conversation came from new research by event sponsor Taulia, which looked at how retail is emerging from the COVID area. Some highlights from the report, shared during the meeting, included:

  • The Initial liquidity shock was short-lived, with most firms paying back extra borrowing quite quickly, but there is now increased focus on working capital provisions ‘just in case.’
  • Capital Expenditure has been brought forward but is now focussed on technology, not on stores.
  • Supply chains went a bit crazy and nearly 60% of the retailers we surveyed said they have or plan to change their procurement strategy as a result.
  • Larger firms have acted to protect their suppliers. Nearly 70% of those we surveyed directly support their suppliers’ cash flow through SCF, or simply by paying earlier. 
  • Consumer behavior has permanently shifted online. Nearly 90% of those we surveyed have already or are planning to develop new online sales channels.
  • Future online strategies: build or partner? Smaller companies may partner with firms like Amazon – so will larger players if they can’t build the technology fast enough

For those around the table, these pandemic issues were certainly front-of-mind, but other themes also emerged. One of these is managing risks in volatile markets, with one online retailer saying he was spending a great deal of time managing commodity risks and FX risk – a problem that echoed with other group members, especially in the FMCG sector. 

Perhaps the most prominent of these new challenges was a focus on ESG (Environmental, Societal, and Governance) issues, especially around sustainability in the wake of the COP26 summit in Glasgow. Many of the treasurers spoke of renewed pressure from executives for greater ESG awareness and action across the business in the wake of the summit.  For treasurers, this has meant looking for ‘greener’ investment options but also supporting more sustainable practices among suppliers, often through ESG incentives built into SCF programmes.