Retail 2025: 43 retail leaders reveal strategies for next year

The report, produced in association with Zebra Technologies and now in its 13th year, is based on conversations with 43 leaders across 39 of the UK’s most influential and rising retailers, and provides direct insight into the conversations happening in UK boardrooms.   

The Bank of England interest rate may still be high at 5% as of September 2024, but with the ONS reporting that interest rates have fallen from 4.2% in January 2024 to 3.1% as of August 2024, it is widely expected interest rates will come down by the end of the year.  

2025 strong out of the starting blocks 

Despite the new Labour Prime Minister Sir Keir Starmer warning of a “painful” Autumn Budget, the retailers we spoke to were positive about both their prospects for the remainder of 2024 and the outlook for 2025. 

Our research found that 85% of the 43 senior leaders – whom we interviewed between May 21 and June 28, 2024 – expect year-on-year sales in 2025 to be higher than in 2024, with 13% expecting sales to be “much higher”.  

This is an even more favourable sentiment than in last year’s Retail 2024 report. When we interviewed leading retailers in 2023 and asked them about their outlook for the coming year, 71% said they expected to see year-on-year growth in 2024. 

What did the retailers say about growth prospects for next year?   

From new store openings and rising consumer sentiment to rolling out fresh strategies, there are multiple reasons why retailers feel their businesses are in line for growth in 2025. 

We have picked out some of those feeling confident. 

Joe Wykes, chief executive of pet supplies retailer Jollyes, which opened its 100th store on March 1 and continues to add to its store numbers, having gone from 66 to 106 in three and a quarter years, says: “We will continue to open stores and expect good growth in the core estate.” 

 

Daniel Marsden, CEO of Lounge, which reported a £2.6m reduction in profit before tax in the year to June 30, 2023, to £5.5m – but sales growth of 6% to £67.9m – comments: “We are a brand that is laser-focused on our mission; 2025 will be the year where we are mixing up the products we’re launching. We can’t reveal too much just yet, but it won’t be anything you’ve seen from Lounge before and we’re sure it is going to make our mark in fashion and not just underwear.” 

Global gains 

Lounge said in May that much of its sales increases came from international expansion and there are several retailers eyeing global growth in the year ahead. 

Gareth Newman, CEO of fashion brand Blakely, generated sales of £33m last year and is on track to hit £60m this year. He remarks that growth across the EU is a key focus in the coming year, with a post-Brexit HQ and warehouse now set up in Belgium serving the European market. He says: “The EU is obviously a 300-million-people area, so there’s a lot more scale there for us. Menswear does well in the EU already, and we’re anticipating that growing, but also women’s to do the same.” 

Nathan Williams, CEO of Mamas & Papas, which reported full-year sales of £144m and £10.9m in profit for the year to March 2023, says it is a combination of like-for-like growth, new space, international expansion and playing in new categories, which is fuelling his retailer’s expected sales hike in the year ahead. “International expansion is our fastest-growing channel this year,” he explains about the business, which said in January that it was on course for a record year of sales in 2024. 

He adds: “We are expanding our business in Spain with El Corte Inglés. We have now opened our local retail conglomerate partnerships with Central Group in Thailand, and we’re launching with MAP Group in Indonesia. We’re expanding our Australian operations, too. So we’ve got a lot of new international business.” 

Certainly, not having to rely solely on the UK market is a positive for retailers, with menswear brand Percival’s founder and CEO Chris Gove saying: “We’re seeing signs of economic recovery within our demographic. But also a third of our customer base is US-centric, specifically on the coast, so LA and New York. And it just seems like their wallets are more robust.” 

He adds of the company that grew sales from £8.5m to £11.7m between 2022 and 2023: “Our average order value is about a third higher in the US; first-order profitability is twice as high. We charge 20% more in the US and we don’t see any resistance to that.” 

Consumer sentiment – looking up?  

Positive vibes are filtering through from retailers in general, relating to the economic situation, after a tough few years for the industry and for the consumer. 

Anja Madsen, retail chief operating officer at Pets at Home, says: “Across the market, people are waiting for interest rates to come down to really see a meaningful change in behaviour, but it is looking like a much more stable set-up for growth.” 

The CEO of one clothing retailer does not think consumers are confident to spend right now and predicts this will come later in 2024 – but next year is a different story. 

“I think there’ll be more opportunity for people to have felt the benefit of some of the wage rises, some of the changes in cost of living starting to play out a little bit more,” they say.