What can we expect from retail in 2025?

Although 2024 was a remarkable year for the retail industry, both in terms of investment and consumer spending, 2025 could even get off to a solid and buoyant start. However, a year usually has its ups and downs, with fluctuations that depend on various factors and that will change (drastically or not) over the next 365 days.

That's why 2025 should be prepared for several factors that involve strategy, attention to detail, perspicacity and, above all, adaptation.

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1. Retail price inflation

Retail prices are expected to rise. This brings with it a decrease in consumers' willingness to spend on goods that are not considered essential. Retailers then have to ensure that several factors keep consumers interested in consuming their products, not only for other types of goods but especially in the face of increasingly fierce competition:

- Good value for money

- Investment in operations technology, cost control and improved planning,

- Renegotiate supply contracts

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2. Personalisation

Each consumer has a history, a footprint and a type of purchase that makes them unique. It is this characteristic as an individual that makes them special and with a particular taste in each item they purchase. Retailers, through points programmes, communication actions and special offers, often supported by apps or AI technology, should develop specialised offers, with personalised communications, informing an offer of goods and services designed especially for them.

3. Sustainability

Sustainability is an old theme, but one that is still little developed and applied by brands. Although there is some/many effort on the part of brands, this theme should always be communicated, remembered and innovated in the eyes of those who consume a brand. Exchanging plastic bags for paper bags, environmentally friendly/biodegradable merchandising, the use of electronic receipts, are some of the most visible bets, but are these the ones that consumers appreciate the most?

4. Employee retention

The retail industry is known to have one of the highest staff turnover rates, for various reasons, such as repetitive day-to-day work, lack of incentives for employees or insufficient training. All of this, coupled with a distancing attitude between the institution and its employees, which does not encourage their involvement in the company's strategies and long-term vision, is one of the main factors in demotivating employees and, consequently, causing them to become unhappy and leave for another organization.

This constant turnover causes instability in work groups and in the human resources structure, often resulting in poor pre-selection of the staff hired. This results in wasted HR staff time and financial losses for the organization. According to a Deloitte study, 22 per cent of new employees leave their jobs within the first 45 days of employment. Sometimes these types of mistakes are related to haste or urgency and hiring spikes.

Letting employees know that there is a progression plan that includes training, pay rises or even improved working conditions are important points that have proven to be crucial to keeping their job.

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5.? Digital transformation in payments

The National Strategy for Retail Payments 2025 foresees significant changes, including the promotion of electronic payment solutions and the possible obligation for companies to accept at least one method of electronic payment. Retailers must adapt to these changes to improve the customer experience and increase efficiency.

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6.? Increase in insolvencies

Insolvencies are expected to grow in the services, construction, retail and textiles sectors in Portugal, with an estimated increase of 19 per cent in 2024 and 10 per cent in 2025. This scenario requires retailers to strengthen their financial and operational resilience to face possible adversity.

Finding valid partners with the technical and human resources to enable companies to be prepared to face new challenges is a crucial step in their sustainability and preparation for a new challenge in 2025. Just as a new partner can be an important support, an ill-prepared partner can easily become a problem and an obstacle that will be difficult to overcome.

It is therefore clear that working with an experienced retail partner in 2025 is not just a matter of convenience, but of survival and success in a highly competitive market. It is essential to be provided with the strategic and technical support needed to overcome challenges, grow sustainably and meet the expectations of modern consumers.

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At RMG we do this on a daily basis with dozens of brands, through management, management support, tenant representation, brand expansion, as well as expansion processes - direct or through various franchising models, retail real estate projects, asset management, but also M&A processes, among other specialized taylor-made services for brands and retailers, owners and developers.?