A combination of factors has made for a tricky retail landscape this year – but, as our Retail & Consumer Goods practice Lead Mark Collins writes, there are still ways that organisations in the industry can grow in 2025.
Sainsburys have made numerous job cuts, including across senior management roles. Asda have also made efforts to reorganise after their worst Christmas in years. Co-op Central are closing stores. It feels like we’ve had nothing but bad news in reports about the retail sector in recent years – and I’m sorry to say that 2025 looks set to be another challenging year in the UK. But just what is going on? When will things pick up, and what does the picture look like for talent in the retail space?
It's the economy, stupid
You’d think that some divisions of retail, like grocery, are effectively recession-proof, which is only true up to a point. People always need to eat, but how and what they buy naturally fluctuates depending on how much they have in their pocket. People on low and middle incomes are feeling the pinch disproportionately, with no real end in sight to the cost of living crisis. Indeed, the Bank of England recently halved its UK growth forecast to a measly 0.75% while predicting that inflation will jump to 3.7%. This is nearly twice the Bank’s target of 2% - and inflation has already hit 3% this year. (Furthermore, official inflation figures do not typically reflect price increases for items like food and energy bills.)
Not even lowish interest is enough to dispel doubts about the market. The Bank may have lowered rates to 4.5%, down from 4.75%, and while the UK narrowly avoided a recession in Q4 last year, looming changes to employers’ National Insurance payments and minimum wage – set against a backdrop of ever-rising utility prices, the ‘death of the high street’, and a massive increase in shoplifting – are affecting many organisations’ ability to grow. This will have a domino effect on unicorn companies and startups; less funding shall slow down the economy, which in turn will create a knock-on effect for retailers. There is uncertainty, meanwhile, about the impact of further trade tariffs that Donald Trump may yet impose on the UK after ordering a 25% hike on steel imports. It is naïve to think that more tariffs would not hinder the retail sector yet more, though it’s hard to say definitively just what the picture might look like.
A talent squeeze in tricky times – but what can candidates do to stay competitive?
So, what does this admittedly complicated picture mean for hirers and candidates in the UK retail space? There will certainly be a short-term squeeze for consultants looking for opportunities in retail. From what I’ve heard from my network lately, there is much more work in strategy consultancy than in industry. Companies typically use consultants to help them navigate difficult periods, but as a consultant being too busy can make for a mixed blessing; it might mean the economy is underperforming!
As for full-time industry candidates, it will be harder than ever to find new jobs in 2025. Average performance won’t be good enough; if you want a change in role, you’ll have to go above and beyond against candidates of similar profile. My advice to candidates at this time would be upskill as much as possible and add new, varied strings to your bow. Think of yourself as a Swiss Army Knife – don’t just sit behind a desk! Be sure to let your current company know what you want, also; being more amenable to other things could lead to opportunities you didn’t know existed.
Some divisions in retail have potential to grow in 2025
Areas to watch out for include AI – which is always a hot topic – sustainability, packaging, and revenue management. These represent novel ways for organisations to manage their profits better in sectors that are still relatively new and rapidly developing. Talent in these areas will have more options than their peers in retail. Retailers will need to go beyond any ‘business as usual’ efficiency programmes they might already have in place and embrace what technology like AI can do to help with frequently challenging areas like labour scheduling. It remains to be seen, meanwhile, whether tech can be leveraged to combat theft, in addition to the traditional prevention methods (e.g. physical barriers and product tagging) that many retailers have invested in lately.
What else can UK retailers do? I know someone with a few ideas.
So, will 2025 really be a case of just ‘staying alive’ for retailers, or are there any opportunities for growth? I have an expert source who says it’s actually the latter. I can’t reveal the identity of this senior figure from a major UK retailer, but he’s given me some great pointers for this article – including a few areas that organisations can look at in order to boost productivity and add some welcome black figures to their P&L sheet. Just a few of these are:
Finding ways to offer lower prices on essentials. It sounds obvious, but retailers cannot rely on customer loyalty in this economic climate. If shoppers can get the same product for less elsewhere, they will – so organisations should prioritise simple, stable, and non-tricksy offers on basic goods.
Innovative meal solutions. Beyond pricing everyday items as keenly as possible, innovative meal solutions will go a long way for grocers’ wider product propositions. I’m thinking of options such as Marks and Spencer’s family Dine In, or Tesco’s premium own-label offerings as reasons to shop at these supermarkets – others should follow suit.
Tap into the power of personalisation. I’ve seen numerous retailers invest in their data infrastructure and talent in recent years, but it’s scratching the surface of what could be possible for the sector. Using personalised sales targeted to shoppers through loyalty data still represents an opportunity for significant growth that organisations can and should capitalise on.
Invest in non-core revenue streams. Areas such as retail media are profit drivers that will become increasingly important as organisations gather more data. It might sound odd advising retailers to make money outside of selling products, but it can be done!
I’m always happy to speak to retail organisations looking to boost their leadership functions, as well as to candidates looking for advice and a new challenge in the sector. Feel free to get in touch – and meanwhile, let’s hope the retail landscape in the UK improves sooner rather than later!
Special thanks to my anonymous source for his contributions to this article.