A look at the challenges and opportunities for retailers this year.

Jane Neal, Content Editor

March 5, 2024

5 Min Read
Reza Estakhrian/Getty Images

The inaugural Licensing for Retail Day conference, held in London last year, brought together over 100 U.K. retailers to share information about potentials in brand licensing. This year’s event, hosted in partnership with Licensing International, is set to take place March 7 at Convene, London. Ahead of the event, License Global looks at some top U.K. retail trends. 

According to Statista, retail is an important contributor to the U.K. economic landscape, not just as a source of income but also as an employer, as the sector employs an average of three million people across more than 235,000 enterprises. With a few exceptions, the annual value of U.K. retail sales has steadily increased over the past decade, with 2022 witnessing the highest total of roughly £496 billion. In 2021, the gross value-added of U.K. retail trade, excluding sales of motor vehicles, was more than £100 billion. 

Like most countries, the U.K. had a difficult 2023 due to concerns over a possible recession. And while the holidays are behind us and we’re well into 2024, PwC reports trends seen during the holidays still resonate. Mainly, consumers “played it safe,” which translated to more disciplined spending in general, with shoppers being more conscious about what they bought. 

Related:Minding the Stores: The Partnership of Retail and Licensing

“Despite easing inflation, rising wages and the recent National Insurance cut, retailers have already talked about a slow start to 2024, as shoppers remain cautious about spending,” says Lisa Hooker, leader of industry, consumer markets, PwC UK, commenting on the December 2023 ONS Retail Sales figures. “So, while the prospects for the sector may improve later in the year, it may be a case of battening down the hatches for the early months of the new year.” 

PwC says, given the trend toward considered consumption, winning formulas combined brand relevance, value for money, scale and multi-channel offerings. Overall, PwC is expecting a more normalized – if slightly subdued – year ahead, with less impact from inflation, less variation in retailer performance between different product categories and less variation between in-store and online. 

In January, the U.K. Office of National Statistics estimated retail sales volumes (quantity bought) rebounded by 3.4% in January following a record fall of 3.3% in December 2023 (revised from a drop of 3.2%). This was the largest monthly rise since April 2021 and returned volumes to November 2023 levels. 

“There was promising news as sales volumes rose for the second time in three months, following 19 prior months of decline,” says Kris Hamer, director, insight, British Retail Consortium, responding last month to the latest ONS Retail Sales Index figures, which showed sales up 5.2% by value, and up 0.7% by volume. “This reflected rising levels of consumer confidence, as well as a boost from the January sales. Categories, such as computing, cosmetics and toiletries performed well. Food sales continued to outstrip non-food sales – mainly due to higher levels of inflation on these products. Nonetheless, shoppers remained cautious as they entered the third year of the high cost of living.” 

Deloitte expects retail to become more demand-driven in response to the changing consumer. When looking at U.K. retail trends for this year, Deloitte expects to see the development of products designed for and targeted at previously under-represented consumer groups, including ethnic minorities, an aging population and disabled households.  

Scott MacRae, senior buying manager, menswear, school, socks and licence, George at Asda, says customers are being pickier in their choices; retailers that offer something consumers already have will be less successful. 

“Newness is critical to drive purchase, desire and a reason to buy,” says MacRae, adding there is a trend toward quality; it’s not all about price, because when consumers spend less, they often spend better and buy to last. “We are really proud of our step up in quality and we get a lot of 5-star reviews through our website giving great advocacy to drive new customers to appraise us.”  

Another trend MacRae continues to see is the return of events.  

“Pre-COVID, events were in decline and post-COVID we have seen them be even more important,” MacRae explains. “This is playing into occasions that are either smarter, more fun or celebratory. It is the medicine to the struggles of daily life to really embrace the joy of events. We have seen experiential grow – be it live events, sports, cinema, music concerts driving IP shifts and slightly different patterns. It’s an exciting time of change.” 

Retailers should also keep top-of-mind the growing global focus on sustainability. Licensing International’s 2023 Global Licensing Industry Study reports in 2022 consumers shifted their focus on how to economically drive sustainability in their lifestyle.  

“The top retailers continued to support their sustainability strategies through measures such as setting ambitious carbon emissions targets, reducing single-use plastics and providing consumers with the tools to make environmentally conscious shopping decisions,” says the study. 

Deloitte agrees retailers need to focus on ethics and sustainability, reporting the European Corporate Sustainability Reporting Directive (CSRD) will be front and center of a new regulatory environment for retailers, forcing them to put responsibility at the top of the agenda: “Regulations will add complexity and costs to doing business, but there are also growth opportunities linked to being a more responsible business.” 

“Retail plays a vital role in unlocking household spending and boosting economic growth across the U.K.,” says Hamer. “As the everywhere economy, retail serves all of us, providing the things we need as well as local jobs and investment. It is vital that our future government recognizes the importance of retail considering the cumulative cost burden created by new and existing policies. Business rates’ rises, inadequate recycling proposals, new border control costs; only by addressing these issues can the next government unlock further investment for the country and boost local and national economic growth.” 

Read more retail licensing news and trends.

About the Author(s)

Jane Neal

Content Editor, License Global

Jane Neal is a Content Editor for License Global. Working remotely in the great state of Wisconsin, Jane specializes in retail and pop-culture trends.

She has worked extensively in the communication field as a managing editor, advertising copywriter, technical writer and journalist. She detoured for several years into academia where she taught journalism, English and humanities at the college level.

A complete Marvel nerd, she enjoys food, films, fishing, friends and family … and alliteration.

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