As 2024 begins, what do retailers think will top the agenda for the year ahead? We asked leaders of some of the UK’s biggest retail businesses to get out their crystal balls and make some predictions
Stuart Machin, chief executive, Marks & Spencer
“Customers are always more value-focused in the first quarter of the year but will be even more so given pressure from inflation, interest rates, energy bills and geopolitical uncertainty.
“Therefore value is a – if not the – key theme for retail in 2024. But this doesn’t mean offering the lowest price possible; it’s about giving customers a fair value exchange – what we call trusted value. It is all about quality, price and experience.
“On value for us at M&S it means no tricksy promotions; no diving for the line on quality; working with suppliers in partnership to innovate, rather than just focus on price.
“On experience, it’s about making each interaction time well spent. Whether that’s being able to get everything they need for dinner in an environment that’s immersive and easy to navigate or finding a pair of jeans, in their size, that are delivered the next day.
“Put another way, if a customer feels shortchanged – how they’ve spent their time, as well as financially – you lose a bit of their trust, and they are less likely to return. With today’s customers more time-poor and the cost of living continuing to bite, that will be front of my mind in the year ahead.”
Manju Malhotra, outgoing chief executive, Harvey Nichols
“Despite enduring choppy waters throughout 2023, the retail sector continued to make a strong contribution to the UK economy. The sector, along with hospitality and F&B, has had to be creative and versatile with business strategies as profits continue to be disturbed due to the government enforcing no tax-free shopping for tourists.
“In 2024, I believe the retail sector can flourish as we regain economic stability as a country, although a backdrop of a general election, the ongoing impact of geopolitical instability and a significant number of UK homeowners renewing their mortgages at higher interest rates will weigh down on the consumer. Therefore business strategies will need to adapt to this ongoing period of uncertainty.
“With AI on the rise, I hope we see technology used correctly to bolster our businesses by reducing friction in both the customer and employee experiences.”
Chris Griffin, chief executive, Secret Sales
“While innovation will be crucial for the retail industry to rebound in 2024, it must be driven by a clear focus on achieving commercial success.
“The coming year is set to unveil an intriguing coming-of-age story for many industry players as they are forced to adapt and win over increasingly discerning customers. Doing this in a climate where commercial costs are soaring and profit margins shrinking, customer loyalty is no longer a luxury but a necessity. The companies that succumb to these pressures may not be the ones we expect, but those that get this key balance right will flourish.
“However, as companies look to drive stronger, deeper connections with consumers, they must consider the current socio-economic concerns. These concerns are not fleeting and they demand an ecologically and financially sustainable strategy that works for both company and consumer.
“Our partners are excelling in this area by embedding off-price at the heart of their business model, recognising it as a long-term source of margin and brand equity. A crucial aspect of this approach is demonstrating to consumers that off-price retail can be the most planet-friendly and consumer-centric choice. By offering quality products at lower prices, off-price retail encourages consumers to invest in durable goods that will last for years, not months. This also creates a thriving resale market. I see this only becoming more prevalent next year.”
Eve Williams, general manager, eBay UK
“There’s no doubt that 2023 was a challenging year and searching for value was the driving factor behind consumers’ purchasing decisions. Even with the spending slowdown caused by the cost-of-living crisis, we saw the biggest Black Friday ever for refurbished technology products on eBay, with one Dyson product being sold every 22 seconds.
“In 2024, I expect to continue to see pre-loved shopping become more mainstream as consumers trust that they can receive high-quality and great value from non-new products. Millennials and Gen Z will continue to lead the way as a generation of savvy shoppers who are also eco-conscious.
“I’m feeling optimistic for the industry as inflation eases and consumers slowly rebuild confidence, which will be welcome to the hundreds of thousands of small businesses we represent on eBay UK. Here’s to a positive year ahead!”
Gavin Peck, chief executive, The Works
“Looking ahead to 2024, we expect the consumer environment to remain challenging as customers continue to grapple with cost pressures. Against this backdrop, customers will continue to budget carefully and seek value, which we are well-positioned to deliver at The Works. We are committed to ensuring our customers can continue to read, learn, create and play on a budget, and our value proposition makes us the ideal choice for consumers seeking the products they love at affordable prices.
“More broadly, we have seen high levels of discounting across the sector since the autumn, including over an extended Black Friday period and in the run-up to Christmas. As the market remains competitive, we can expect this increased promotional activity to continue in the January Sales, which retailers will have to balance with rising cost pressures such as the recently announced increase to the National Living Wage and business rates.
“Given the financial challenges that many consumers will continue to face in 2024, it is also possible that the delayed Christmas shopping we have seen this year will translate into other seasonal events, meaning late surges around Valentine’s Day, Easter and back-to-school.”
Peter Jelkeby, chief executive and chief sustainability officer, Ikea UK and Ireland
“Although the latest figures from the Office for National Statistics show that inflation is slowing more than expected, consumers will continue to feel the pressure on their wallets, with prices for most basics remaining substantially higher than they were two years ago.
“With that in mind, value for money will continue to be a top priority for consumers in 2024, and that presents an interesting challenge and opportunity for the retail sector.
“Retailers should be looking at how prices can be reduced for shoppers – something Ikea is committing to do across thousands of products in the first three months of 2024 – but should also anticipate an increased, and warranted, expectation that value must stand for more than low prices alone.
“It’s never been enough to simply provide products that are low-cost and consumers will continue to demand more ‘meaningful affordability’ in 2024. We’re seeing this demand clearly in our own sales data, and it’s also why sustainability continues to be at the top of our agenda. We continue to incorporate our vision into all our actions by democratising a more sustainable life at home, operating in a more sustainable way and having a positive societal impact on the most vulnerable in our communities.
“In a competitive market and with customers having less disposable income to spend, of course, purchase decisions aren’t only driven by value for money and perceptions of quality, but also by convenience and accessibility.
“The next 12 months will be challenging, without doubt, but with a strong culture and performance mindset, we have a clear road ahead of us: to assemble a better future together by continuing to adapt, innovate and transform, meeting the needs of both people and the planet in the years to come.”
Lionel Desclée, chief executive, The Very Group
“The market will be challenging in 2024 and retailers will continue to have tough decisions to make about whether they invest or retrench. As we believe consumers will reward retailers who sharpen their proposition during tough economic times, we’ll invest in our customer-led strategy while closely managing costs.
“By expanding our assortment, strengthening our flexible ways to pay and progressing our tech transformation to deliver an even better digital customer experience, we’ll keep delivering the ease, choice and understanding that our family-focused customers rely on Very for.
“If reports that interest rates may start to come down sooner than expected prove to be true, this should boost consumer confidence and spending on discretionary items. In the meantime, value will remain a top priority for families and it’s more important than ever that retailers understand what that means for their customers.
“Beauty performed well in 2023 as more consumers recreated salon and spa experiences at home. That trend looks set to continue and we’ll be onboarding more brands in the home wellness space this year. Sportswear products that elevate performance, like specialist running trainers, are becoming more mainstream and we’ll see more retailers tap into that. At Very, we’re adding around 20 new sports and outdoor brands as health and fitness remains a key trend.
“Technology will continue to underpin success for all retailers and we’ll be taking more steps forward with the re-platforming of our website and app. I think we’ll also see more AI-focused solutions rolled out across the retail sector. We’ve recently expanded our collaboration with Amazon Web Services to launch a new Gen AI Innovation Lab that will help us deliver more interactive and personalised digital shopping experiences. I’m excited to see where that takes us.”
Paul Marchant, chief executive, Primark
“Going into 2024, I feel cautiously optimistic about the year ahead, our business and the future of the high street. There is no doubt that household finances will continue to feel stretched but with value still more important than ever for people, I think we’re well placed to meet that demand.
“While the high street is facing plenty of challenges right now with costs for businesses increasing and antisocial behaviour and retail crime continuing to provide real threats, we’re starting to see greater collaboration to address these issues.
“In the past year, we have seen a growing recognition of the importance of high streets and the role they play in communities and the local economy. Shopping as a social activity is firmly back on the (shopping) list, so I think that we will see stores becoming much more focused on the experience they can offer customers, alongside the products they sell.
“When it comes to what consumers will be buying, we recognise that many are looking for timeless and versatile wardrobe essentials they can wear all year round. Classic silhouettes, neutral shades and elevated essentials will all take centre stage. Alongside those core essentials, they are looking to be inspired by new products and ranges and express themselves through their clothing – with more of a focus on personal and individual style. The trend for mixing high street fashion with vintage pieces came through this year and we expect to continue into next.
”Another trend that will influence how people shop and what they buy is the desire to prioritise experiences such as celebrations with family and friends. It’s widely predicted that international travel is set to overtake pre-pandemic levels next year, so we expect that will impact some of the shopping behaviours we will see.”