After several attempts to determine the optimal commencement for this article, and acknowledging that there is no particularly pleasant way to tackle the subject, I believe it is best to address the core issue directly. Over the past year, volatility has ceased to be an exception and has become the norm. Retail and distribution sectors are facing escalating pressures. The feared tariffs are exerting a sustained impact, supply chains are unstable, consumers are burdened by the escalating cost of living, and profit margins are under increasing pressure.
The empirical evidence is unequivocal: according to recent international studies, the 2025 tariffs have inflated the prices of imported goods (by more than 1%, according to the Bank of Portugal) and even of domestic goods in import-intensive sectors. To date, merely a fifth of this impact has been passed on to the consumer. The remainder is being absorbed by suppliers and distributors, constricting profitability and eroding investment capacity. In essence, entire sectors are operating in survival mode rather than prioritising growth.
While the reality is disconcerting, it has been summarised concisely in a single paragraph. I dedicate the subsequent paragraphs to solutions, as there is little utility in lamentation. Faced with this scenario, the frequently posed question is: how can we mitigate costs? However, the question ought to be reframed: how can we establish structured, enduring resilience that yields sustainable margins?
How? Let us proceed.
The answer lies in completely rethinking the way cross-functional costs are managed. It is not about making ‘blind’ cuts, but about freeing up internal resources so that teams can focus on what matters most: generating value at the heart of the business. When companies continue to manage dozens of non-strategic categories on a daily basis - such as energy, maintenance, logistics, consumables, telecommunications and many others - they lose focus, time, execution capacity and, at the end of the day, growth and revenue.
Our practical experience in the sector indicates that a significant proportion of organisations operate with structures and processes that are no longer commensurate with current demands. Contract review cycles are unduly protracted, suppliers are often suboptimal, and transparency regarding the true cost per category is frequently constrained. In the prevailing economic climate, we advocate for shorter renegotiation cycles, enhanced monitoring of cost creep, and a more granular approach to risk assessment. In summary: most companies continue to operate using outdated models and are experiencing a daily erosion of efficiency and financial resources.
Today, intelligently mitigating costs entails rigorously mapping exposure to pricing and external volatility, a practice many retailers still neglect with the requisite level of granularity. It signifies renegotiating informed by data, rather than perceptions or obsolete records. It involves diversifying suppliers, not merely geographically, but also with respect to operational risk. Furthermore, it means integrating systems that facilitate real-time visibility, which is essential for adjusting margins and pricing within compressed cycles and transforming supplier management into a continuous discipline as opposed to a purely reactive approach.
Nevertheless, as is frequently asserted, the pivotal aspect is as follows: when companies outsource the management of cross-functional categories, they release tens, hundreds or, in certain instances, even thousands of internal hours per month. This time should be channelled and concentrated on customer engagement, innovation, and differentiation strategies.
In a year expected to be marked by more price-sensitive consumers, persistent inflationary pressures and unpredictable trade policies, it will be resilience and strategic focus - and not just cost reduction - that will distinguish the winners from the survivors.
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