As we approach the end of 2024, it’s clear that this year has been one of resilience and adaptation. We have seen the high street hit hard with increasingly cautious shoppers after a year of political and financial change. Retail has had to weather the storm yet again.
The Retail Economic Landscape
With 38 shops on average closing every day on the high street, and with over 7,000 stores shuttered so far in 2024, this is more than double the figures we saw during 2023.
The recent budget has also had a marked effect with the increase of the National Insurance bill for employers. This was clearly demonstrated in a recent poll by The Charity Retail Association1 where 27% of Charities stated that they are being forced to consider shop closures as a result. And this is sector staffed by over 186,000 volunteers meaning that employers would be avoiding the worst of the NI Increases but still feel cuts are necessary.
With 38% of Charities stating they are also considering scaling back on new shop openings, this has a sharp knock on effect local economy, opportunities and growth.
And it’s not just Charities seeing unprecedented rises in employee costs. Tesco face an extra £1bn increase in their National Insurance bill2. Marks and Spencer’s also commented that they were looking for new cost saving measures as they wrestle with an additional £60m of NI costs. ASDA Chairman Lord Rose said “The industry has been hit hard”
The Retail sector is experiencing prolonged upheaval as it continues to face factors outside of its influence and control such as the cost of living crisis, inflation, EPR and weak consumer confidence resulting in limiting spend to necessary purchasing.
However, recent figures do show some more positive news with an uplift in the figures, showing an increase of sales volumes over the year of 2.4%. This is encouraging news, following a slight dip of 0.7% in October, but the outlook is definitely stronger.
Technology’s Transformative Role in Retail
Artificial intelligence and advanced technologies continued to revolutionise retail in 2024 in ways that went far beyond initial expectations. AI became a practical tool rather than a novelty, with retailers implementing it across multiple areas of their business.
AI Applications helping Retail to drive
- Personalised customer experiences
- Predictive inventory management
- Enhanced customer service through sophisticated chatbots
- Supply chain optimisation
Retailers are leveraging AI to create personalised customer experiences to help predict shopping behaviour and preferences to create tailor made recommendations.
Those Retailers who successfully balanced technological efficiency with a genuine customer connection saw the most significant gains this year.
AI is also helping retailers transform vast amounts of data into valuable insight – enabling more strategic decision making and successful, targeted marketing.
Sustainability: From Nice to Have to Brand Imperative
2024 marked a critical turning point for sustainability in retail. Extended Producer Responsibility (EPR) regulations gained momentum, compelling businesses to take genuine, measurable steps towards environmental responsibility. Brands should have already submitted their first half year data, or Period 1 data, from 1st January to 30th June 2024, with Period 2 data required to be submitted in January.
With the release of the first illustrative fees3, the charges for plastic and paper packaging are becoming clearer, and brands are no doubt holding their breath to see how these translate into costs for their business.
Additional legislative pressure is also mounting with the introduction of an instore customer waste separation and collection scheme in March 2025 which is another step towards eliminating landfill waste and encouraging more of a circular economy approach.
Whilst these initiatives are required and necessary, it could be seen as piling on the misery for the retail industry.
Retail Sustainability Highlights in 2024
Sustainability has also brought many positives too for consumers and brands alike, such as
- Increased transparency in supply chain practices
- Circular economy models becoming more mainstream
- Consumer demand for verifiable sustainability credentials
- Packaging innovation focused on reduced waste and recyclability
Retailers are discovering that sustainability is no longer just about competitive advantage but now increasingly satisfying expectations from environmentally conscious consumers.
If your customers, competitors and moral conscience all point toward change, then doing nothing costs more than doing something.
Consumer Behaviour: Shopping with purpose
2024 saw a significant shift in consumer psychology. Shoppers became more deliberate, valuing quality and longevity over pure convenience or impulse buying demonstrated by
- Increased preference for brands with clear values
- Growing interest in second-hand and repurposed products
- Demand for transparent pricing and ethical practices
- Emphasis on product quality
This is seeing consumers second think where they purchase, and if their purchase is necessary. Behaviour is changing with 66% of consumers recycling or reusing packaging4 and 39% preferring to repair products rather than replace them as well as buying more second hand items. Platforms such as Vinted are reporting over 60% growth and it is thought will comprise 10% of the worldwide fashion market next year.5
Again all positive for the planet but presenting more challenges for the retail sector.
What’s next for Retail
The most critical activity for 2025 for Retailers will be looking for new ways to remain profitable or to gain profitability. Marks and Spencer’s aren’t the only Retail brand searching for cost saving measures. Strategies such as reviewing GNFR spend is often an untapped resource for many brands.
Perhaps looking at cost consolidation, for example, to optimise and control spend across a brand’s entire retail network can significantly save time, resource and money – all of which is in relatively short supply right now.
Platforms such as MyAcopia help brands with sustainable procurement for Consumables; all those necessary products from toilet rolls to till rolls – everything from Back of House through to Front of House.
MyAcopia brings simplicity, access to a wide range of products, supports curated lists and puts the power of purchasing strictly into the hands of the Brand with the ability to see every penny being spent in one place.
Preparing for the Future
Successful retailers in 2025 will be those who will be able to:
- Remain agile and adaptable
- Invest in technology
- Prioritise genuine sustainability, embracing EPR and other green legislations
It’s clear that the retail landscape has undergone transformative changes that have reshaped how brands operate, connect with customers and navigate economic challenges.
2024 has been characterised by resilience, technology, and a development of consumer relationships. As we move into 2025, the most successful retailers will be those who view challenges as opportunities for innovation and transformation.
The future of retail isn’t just about selling products—it’s about creating meaningful, sustainable, and personalised experiences that resonate with increasingly discerning and environmentally conscious consumers.