New Year, New Retail?

Long term trend prediction is (in my opinion) something of a junk science – many of you will likely have already seen the articles doing the rounds on predictions for 2023, from 1923 – however, I think it’s safe to say we can probably hazard a guess at what the next year (not 100!) might hold for retail…

Retail as a Good Job

‘Quiet quitting’ ‘The Great Resignation’ ‘Four Day Working Week’. There’s been lots of headlines about how the balance of power is shifting from employers to employees, with employees now demanding the ability to choose their working hours, location and terms - if they want to work at all, that is.

However, retail has always been somewhat different – demanding in-person presence, bound to store opening times and yet using zero hours contracts to demand a flexibility of its employees that it doesn’t return. However, could 2023 be the year that the Good Jobs Strategy finally comes true en masse in retail? A future of fixed hours, good hourly pay and a career path – but without this leading to higher prices?

Anecdotally from clients and the market, I see retailers moving away from zero hours contracts to guaranteed working patterns and increasing hourly pay to retain staff – many of whom are being attracted from the lower paid social care sector. Here’s to a revolution of employee rights in 2023.

Can I see the Doctor now?

There are enough bleak headlines about the NHS and social care system right now. Without wanting to get political, it’s clear that something needs to change for the UK to offer the high-quality health care we want and need.

The role of pharmacies and health shops has long been talked about. What services can these stores deliver to alleviate pressure on the front line? Will we finally see in-store health checks like in Japan? If we are all encouraged (or forced) to take more responsibility for our own health, will in-store dietary advice become appealing for the masses?

For this to take off, I see two considerations: (1) The right balance of services between health and medical advice – and the skilled labour required to deliver it; and (2) How to get consumers to pay for something they can ‘get for free’ on the NHS.

No pain, no gain?

Finally, I couldn’t end without tackling the reality of reduced consumer spending, the ongoing cost of living crises and the fact that almost 50 stores closed for good every day in 2022. It would be na?ve to suggest that this won’t remain a challenge in 2023 however are we seeing Spring shoots of hope with wholesale gas prices down, shop price inflation down (albeit marginally and food prices still up) and interest rates forecast to steady around Summer this year? I certainly hope so.

While the UK retail market will remain highly competitive, investing in the retail basics of the right product, place, price and promotion will never be a bad idea. For example, unlike other supermarkets, ALDI never dropped its focus on these core principles, resulting in it overtaking Morrisons to become the 4th largest grocer last year. I'm sure we will see plenty of other retailers sharpening their pencils and following suit in 2023.

What do you think of the outlook for 2023? Will this be the year the metaverse really takes off? Will consumers trade off sustainability for price? Do they even need to? What other trends do you think will shape retail?