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Consumer products and retail (CP&R) companies are maintaining growth as a priority while contending with increasingly difficult conditions for achieving it, according to the EY-Parthenon 2026 Growth Survey.
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Read moreGrowth is becoming harder for CP&R companies, and nearly all survey respondents say they have changed their growth strategy in the last 12 months due to external market pressures. Eighty-five percent of CP&R respondents (slightly more than respondents from all sectors, at 80%) reported that the current market environment is more challenging for growth than it was a year ago due to macroeconomic pressures, technological change and other disruptions.
Respondents report high confidence that AI can be a positive factor for growth but are struggling to fully integrate it with their growth initiatives.
Below, we look at five questions to understand how CP&R companies are responding under pressure and how they can win in the current environment.
Eighty-five percent of CP&R growth leaders say today’s business environment is tougher than it was a year ago, suggesting that the headwinds are real, broad-based and not just a problem for underperformers.
Seventy-one percent of CP&R respondents say geopolitical pressures and volatility — factors such as interest rates, trade policy, inflation and global supply chain stability — are the leading external disruptors causing them to change their growth strategies in the last 12 months. The other top pressures are coming from technology innovation (particularly AI disruption and new AI-enabled entrants), regulatory and legal changes, and shifts in customer behavior.
External disruptions create economic and competitive challenges that stymie growth, while market volatility introduces new risks and uncertainties that make it difficult to plan new growth strategies.
More than half of CP&R respondents say most of their growth initiatives fell short of expectations over the past 12 months, a clear example of how the challenges are impacting their ability to execute growth strategies.
Key takeaway: CP&R leaders are able and willing to change strategies quickly in response to external disruptions, but to convert the changes into growth, they need to combine their agility with successful execution.
CP&R companies are responding by rewriting their growth playbooks in mid-flight. A nearly universal 99% of CP&R respondents say they changed their growth strategy in the last 12 months, reflecting a widespread view that volatility is a permanent condition.
They are also becoming more innovative, combining a wider variety of growth initiatives with traditional approaches. Strategic AI — AI that is used to inform and execute growth choices, not just improve efficiency — is on an equal footing with traditional product and market development strategies, with 66% of respondents using these as leading growth levers.
Many are also choosing not to go it alone but are tapping their business ecosystems, with 62% of CP&R respondents using strategic partnerships, alliances, franchising and licensing for growth.
Key takeaway: Strategy refresh is no longer a periodic exercise but a continuous discipline. Leaders who adopt regular, responsive strategy review will gain a competitive advantage over those still treating it as a one-off event.
Uncertainty is reflected in mixed sentiments about AI. CP&R executives say they are confident in their ability to use AI to enable growth, but many are still in the early stages of adoption.
CP&R leaders are highly optimistic about the potential for using AI to accelerate growth in general (91% of CP&R leaders vs. 78% of all respondents), and 80% of CP&R leaders say they are piloting or using AI tools across a range of growth-related initiatives.
Yet only 33% of CP&R leaders say they trust AI to help make growth-related decisions. Seventy-eight percent of CP&R leaders are using AI tools mainly to improve efficiency and productivity, indicating that confidence in AI is growing faster in some areas than others.
Key takeaway: AI has won the belief battle but not the trust battle. The winners will be those who close that gap fastest by moving AI from back-office efficiency into front-line growth decisions.
While the challenges to growth are coming from outside the organization, many of the barriers to rapid innovation stem mainly from internal constraints.
CP&R companies say the challenges blocking them from innovating faster than competitors are factors like skill gaps, fragmented data, outdated systems, budget constraints and risk and compliance functions that act as gatekeepers rather than enablers.
Despite the challenges, confidence remains high. Leaders report strong self-assessments on data readiness, strategy clarity, talent and commercial execution capabilities.
Key takeaway: The biggest obstacle to AI-fueled growth isn’t the technology or the market; it’s the company’s own talent, data and governance capabilities, which means the competitive moat is increasingly built inside the enterprise.
The high number of respondents who say they have redrawn growth plans within the last year is a symptom of pervasive challenges in the market but is also an indication of companies’ willingness and ability to adapt to market pressures when necessary.
CP&R companies will need to rely on their agility by making changes in five key areas:
Leaders should view strategic AI not as a standalone tool but as part of an enterprise-wide growth mosaic that connects pricing, promotions, customer engagement, demand sensing and fulfilment. By improving customer insight, lifecycle engagement, demand allocation, execution efficiency and forecasting, AI can enable consumer companies to grow profitably while managing margin, inventory and experience tradeoffs.
Key takeaway: CP&R companies stand to benefit by using AI for key strategic planning tasks, from demand sensing to longer-term forecasting. To turn ambition into growth, CP&R leaders will need to treat culture, capital allocation, proprietary data and partnerships as a single coordinated program. Companies that pull only one or two levers will see belief outrun results, while those that engage all five stand to convert their AI bets into durable growth.
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