The purpose of this memo is to inform you of the basics regarding Key Performance Indicators, Key Risk Indicators, and to identify specific KRIs for five different risk events identified by the Fresh Market.

Key Performance Indicators (KPI) vs. Key Risk Indicators (KRI)
Key Performance Indicators (KPIs) are measures that shed insights about risk events that have already affected an organization. KPIs are typically designed to provide a high-level overview of the performance of the organization along with its major operating units. These reports often are focused almost exclusively on the historical performance of the organization and its key units and operations.

Conversely, Key Risk Indicators (KRIs) are metrics or indicators that monitor …show more content…
This data for the “Consumer Spending Trends” KRI can be used to observe the potential risk in the event of inflation of prices for goods and services that can rise and, consequently, cause the purchasing power of the currency to fall and the cost increases that are experienced by Fresh Market will then be passed on to its customers. This increase in product to the customer may decrease consumer spending at Fresh Market. Furthermore, this risk includes the possibility that Fresh Market competitors may be attracting their …show more content…
Growth in real wages, for example, drives consumer spending, which accounts for more than two-thirds of the U.S. economy. Consumer spending, then, is a meaningful leading indicator. As it improves, you’ll see demand in the manufacturing and service sectors pick up, too. Consumer spending is also the key driver of corporate profits, which in turn drive the stock market. In fact, nearly every bear market in the past four decades began almost precisely when the year-over-year rate of growth in real consumer spending peaked and began to