From Tokyo to Berlin, from Kansas City to Stockholm: We are observing a globally rising demand for consumer goods. Unchanged is the dichotomy between the price oriented purchase for the satisfaction of needs and the purchase of Luxury and Premium brands for the satisfaction of wants. Retail and industry are profiting from this in equal measure. This is why businesses in the consumer goods industry are speaking of rising profits more or less in unison.

However, in many cases margins are decreasing and this applies to retail as well as industry.

And although there might not be a connection between rising sales and rising profits and decreasing margins, the coincidence of such different developments is an important reason to keep a close watch on the development of margins overall and to counter vigorously in case of need. For the development and safeguarding of profits it is of extreme importance to have stable margins and for this approach the margins of retail need to be considered.

Industry can only be lastingly successful on the market if they solidly care for margins in connection with retail. This also applies to industrial enterprises, possessing a vertical distribution structure.

Rising sales figures and increasing profits should not lead to exuberance in regards to the margin policy. To the contrary, only in times where people purchase more and consume more can margin care be practiced. Right now, decreasing margins need to be curbed. He who has to complain about decreasing margins has to become active and has to develop a ‘margin-turn-around-strategy’. By the way, solid margins are the best stronghold against attack on the quality of products and the position of brands.