A Recap of 2018 for the UK Retail Sector

A Recap of 2018 for the UK Retail Sector

Home » A Recap of 2018 for the UK Retail Sector

2018 was a challenging year for retail as brands struggled with how best to position their offering in the mix of channels now available to consumers. From declining footfall and reduced construction spend to changing spending habits, traditional retailers had to up their game to hold the attention of increasingly savvy consumers.

And for some, there was visible success as overall retail growth in the UK increased by 2.7%. For many, however, nervousness about political factors, increased pressure on disposable income, large high street brands disappearing and a myriad of other factors, it was yet another year of hoping for the best and just getting through it.

Post By Craig Bennett -

Customers demanded more from their shopping experience

Physical stores in the UK continued to undergo a structural change as consumers demanded a less predictable shopping experience. Bricks and mortar shops were, and are likely to remain, the most significant channel for many brands but the role they must play, and the experiences they offer, will continue to evolve. For many consumers, the ability to touch, feel and engage with products satisfies a need that simply cannot be met by online shopping. However, issues with the basics in physical shops such as poor lighting, confused layouts and bad décor were just some of the triggers that saw shoppers taking their business elsewhere.


Reality hit on the high-street

2018 was a year that saw several stalwarts of the British high streets struggle to hold on as they wrestled with the change needed to meet the demand of today’s customers. 43 companies, affecting over 2,500 stores and almost 50,000 staff, went into administration during the year, evidence should it be needed of just how difficult the market has been to operate in.

Online and omnichannel continued to dominate the agenda

Online and omnichannel continued to dominate the agenda The divide continued across food and non-food sectors with the latter losing an almost 30% share to online shopping. Even smaller food retailers such as Iceland got in on the act as consumers looked to benefit from the hassle-free option of ordering their shopping from the comfort of their home and it arriving neatly boxed at a time to suit them.

As supermarkets battled to attract shoppers back in store, they also increased their focus on the experience they offer their customers. A growth area was integrating lifestyle brands as part of a multi-sensory experience; here retailers tapped into time-poor and busy shoppers who are as happy to buy their weekly groceries as they are kitchenware, garden tools and a whole host of other products designed to complement their home, all within a single retail visit.

Interestingly, the emergence of a multi-channel experience using technology as part of the in store experience proved a lifeline for the sector. Shoppers wanted to benefit from the convenience and ease of online alongside the instant gratification that comes from leaving with your purchase in hand. Embracing this, many retailers began to look at how they could introduce a more seamless experience in store or across multiple channels, with the most successful creating a joined up and increasingly personalised experience at every touchpoint a customer may encounter.

Black Friday happened - again...

Showing once again that it’s here to stay, Black Friday remained a highlight of the consumer calendar, however many physical retailers continued to struggle against their online competition. Footfall was down 2.1% on the previous year and only the clothing category showed an increase in spend.

The perception that online would be cheaper remained; there are less overheads and greater efficiencies of scale in wholesale purchasing so it’s easy to see how this assumption is being fuelled. Sadly for bricks and mortar retailers, little support was available from the government to help even the playing field between on and offline brands. Whilst business costs went up, including increases to the living wage, there has been no visible movement to business rates which continued to hamper physical retailers.

Brexit lingered in the background

The continued uncertainty brought about by Brexit continued to dominate the political agenda throughout 2018. As in many sectors, industry experts believe there will be close correlation between the outcome of the negotiations and the health of the retail sector. Any sort of negotiation is likely to be received as positive with growth, albeit minimal, while a hard exit could see the opposite effect of market contraction. It is a situation that observers will continue to speculate on as the UK gets closer to committing to the next steps.

It was a year where investment in retail shopping centres dropped to its lowest level since 2008, UK retail property values dropped by 20% and business rates increased by almost 11%. Uncertainty and change dominated the agenda.

The perfect storm of changing consumer habits and new technology has been a gamechanger in recent years and companies must be prepared to adapt and embrace something new. Bricks and mortar stores are here to stay but it’s no longer enough to just sell products. Retailers must sell a dream, an experience, something aspirational that sits alongside the physical purchase. Ever more thought must be made to the look and feel of a retail space and how products are displayed and promoted to capture the eye of discerning consumers. Most importantly, retailers must get to grips with how they create a single experience across their digital and physical platforms. It’s an expensive and complex time to be in retail, but you only have to look at the demise of so many high street names to see the cost of not getting to grips with change.


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