How can brands drive growth in 2024?
High levels of inflation have forced many brands to lean on increased prices as a lever of sales growth. This year, growth will have to come from elsewhere, presenting marketers with a huge challenge.
The economy has been dominated by the highest rates of inflation in decades over the past two years. As a consequence, brands’ quest for growth has been complicated. The rate of inflation might be set to fall in 2024, but the path to growth isn’t set to get any easier for brands.
The end of 2023 saw signs of inflation beginning to moderate. In November, the rate of inflation dropped to 3.9%, its lowest rate in over two years. Despite this, the Bank of England doesn’t expect inflation to return to its “normal” rate of around 2% per year until the end of 2025.
The Bank predicts UK economic growth will remain “well below” historical levels this year. Monthly gross domestic product is estimated to have fallen by 0.3% in October 2023, according to the Office for National Statistics (ONS).
Forecasts for GDP growth this year vary, but the consensus is it will remain below 1%. KPMG predicts UK GDP will grow at a “modest” rate of 0.5% in 2024, only returning to a “steady” rate of 1% in 2025. This means brands are unlikely to be bolstered by an economy that looks set to be challenging.
Over the past few years, many brands, particularly those in the FMCG sector, have relied on price increases to grow revenue, as input costs increase.
