Russia-Ukraine war perspectives for C&R organizations

Insights to help C&R companies navigate uncertainty amid the crisis

Matt Kramer

Matt Kramer

National Sector Leader, Consumer & Retail, KPMG LLP

+1 614-241-4666

Scott Rankin

Scott Rankin

Principal and the US Strategy Service Line Leader, KPMG LLP

+1 617-988-1474



Sector implications of the Russia-Ukraine war: Consumer & Retail

KPMG's Matt Kramer discusses the impact of the Russian/Ukraine war on the Consumer & Retail sector.

In discussing the topic of Russia/Ukraine, the first and primary focus of consumer and retail businesses as well as KPMG are the humanitarian efforts, including the safety and security of employees, their families, and so many others.  The war has the potential to disrupt significant portions of the global economy, including the availability and cost of products so important to the daily lives of consumers.  

I’ll highlight three impacts for the Consumer & Retail industry:

First:  Consumer trust and confidence

  • Many companies have already pulled out of Russia…but was it quick enough to safeguard their brand and reputation?  
  • Companies are being tested by their customers on whether they are living by their stated Purpose and Values, and getting direct feedback on social media.
  • Initial losses of customer trust could be short, or long term and potentially difficult for companies to earn back.
  • Inflationary pressures are elevating globally. This is most evident in consumer essentials like gasoline and food.  
  • Companies have been forced to raise pricing…but a breaking point may already be here and customers will trade down to alternative products and spend less on discretionary purchases.  
  • Companies need to look internally for efficiencies and innovation to keep prices affordable and preserve margins.

Second:  Supply chain

  • Two years ago, many companies were caught flat-footed, as the pandemic emerged, shutting markets, facilities, stores and restaurants.
  • Today these same companies need those supply chain lessons learned in this crisis.
  • With growing sanctions and significant sources of commodities coming from Russia and Ukraine in grains, oils, and certain metals, as well as fertilizer, companies must evaluate their supply chain and purchasing programs. 
  • Forecasting for supply constraints needs to be determined now to weather the impacts of this war.

Third:  Cyber threats

  • Consumer and retail companies are already cyber targets given their visible brands and heavy reliance on technology partners.
  • With the direct threat of Russian-based cyber-attacks and hacking activists, companies must revisit their cyber incident recovery plans, crisis teams, and strengthen monitoring procedures.

In Summary

As this war and the prolonged impacts evolve, we will continue to monitor the consumer and retail sector and share our insights.

The Russian invasion of Ukraine has the potential to disrupt the global economy. Like other industries, U.S. consumer and retail (C&R) businesses are trying to project the potential short- and long-term impacts. Businesses that operate in the conflict zone, of course, are prioritizing concerns for the safety and well-being of employees. In this bulletin, we assess possible impacts for C&R companies in four key areas: consumer trust and confidence, supply chain, inflation, and cyber threats.

In this brief, we discuss possible impacts for C&R companies and provide CEO insights in four key areas:

Consumer trust and confidence: A different kind of war

  • To a degree not seen before, the Russia-Ukraine war is being fought on social media.
  • Perceived endorsements or slow response to U.S./EU government policies and sanctions could quickly become reputation and social crises.
  • In the U.S., consumer confidence is likely to decline, as prices increase for basics like gasoline and food, squeeze household purchasing power.

Supply chain: Preparing for global disruption, again

  • Two years ago, many C&R companies needed to make very fast supply-chain decisions to ensure inventory for surging and seasonal demand, and many didn’t have the basic information to do so. COVID-19 exposed a lot of gaps, including poor data and obsolete forecasting.
  • Now, in another moment of global supply-chain disruption, C&R companies that invested in supply-chain resilience, forecasting intelligence, strengthening third-party relationships, and vendor risk assessments, are better positioned to weather interruptions in the supply of basic commodities like grains and oils.
  • Although agricultural produce is currently unaffected by sanctions, recent U.S. actions to further restrict trade with Russia and Belarus are expected to create both shortages and significant price increases.

Inflation: Prepare for demand-side impact

  • Inflation was already at rates not seen since the 1970s, which may start cutting into demand.
  • Rising costs put enormous pressure on companies to increase prices, but they will have to carefully calibrate pass-alongs to avoid impact on demand.
  • To preserve margins, C&R companies will need to focus on innovation, automation, and other ways to improve efficiency.

Cyber threats: Resilience and business continuity

  • The outbreak of the war immediately elevated concerns about cyberattacks on critical assets, including infrastructure, government systems, and businesses.
  • Businesses can also be targets of cyberattacks by independent consumer activists (e.g., “hacker collectives”), which may aim to penalize companies that are slow to leave Russia.
  • Therefore, enhanced cyber security is a strategic imperative and a requirement for business continuity management.
  • C&R companies are heavily reliant on online ecosystems of partners as well as cloud-based software, services, and data. Cybersecurity preparedness should include making sure these third parties are also bolstering their defenses.


The course of the Russia-Ukraine war is difficult to predict, but it now seems likely that there will be long-lasting impacts. In addition, by addressing immediate issues, such as keeping employees safe, preparing for shortages and supply-chain disruption, and hardening against cyberattacks, C&R leaders can—and should—begin to assess the long-term impacts. How has the economic outlook changed? How will global trade change? Will consumer behavior change? Will everything go back to business as usual? Using scenario planning to assess probabilities and risks, companies can start to plan for the future, rather than wait for that future to arrive