In 2025, £7 in every £10 spent within the retail sector will come within a physical store. While the online channel is, and will remain, the fastest growing channel, and will be further boosted by social commerce and AI-integrations, more consumers say they enjoy shopping in-store compared to online.
At this juncture, with Agentic AI having the potential to fundamentally shift the online shopping experience in the next five years, it is critical that investment in physical is focused on what makes it unique. As online reaffirms its convenience and function over form credentials, this is the time for stores to focus more on creating unique experiences and enjoyable places to visit. To do so, more investment in the high street must be encouraged, barriers to physical trade reduced, and more online-founded brands encouraged to move to physical.
The threat is that if physical retail does not provide a differentiated experience, the convenience and practicality of online shopping will prove an even greater draw than it currently does. If retailers and shopping location operators are bold, they can create the antidote to a sea of online choice and automation, with far more opportunity for a differentiated experience in the physical world than the digital one.
This report looks at the following areas:
- The size of the retail sector within the UK, as well as market size and forecasts for in-store and non-store retail sales through to 2030
- The interplay of the physical and online channels, including what future AI developments mean for the online channel, and how omnichannel is proving its success in meeting modern consumer needs
- Shopping locations visited in the last six months, including those visited most frequently and why they were visited
- The frequency of solo and social shopping location visitation, the different drivers behind each mission, and how retailers can meet the needs of group and solo shopping shoppers
- Attitudes to the interplay of shopping and personal wellness, importance of relevance of the retail mix in desire to visit, and personal safety when visiting shopping locations
As AI boosts the convenience of shopping online, it will be increasingly important to offer a unique experience in physical stores, one which affirms the joy of shopping in-store.
Nick Carroll, Director of Retail Insight
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EXECUTIVE SUMMARY
- What you need to know
- Outlook for UK retail
- Opportunities
- AI will continue to transform what convenience means in the online channel
- The joy of shopping: fight function with fun
- Supporting the multi-generational shopping trip can unlock spending
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THE MARKET
- Snapshot – market size and forecast
- Broader market factors remain challenging for retailers
- Improving confidence within the mass-market is underpinning retail recovery
- Graph 1: British household financial confidence, 2019-25
- US trade disruption has forced shoppers to look inward
- Retail sales to return to stronger growth in 2025
- Graph 2: all retail sales (incl. VAT, ex.fuel), market size and growth, 2019-25
- Retail sales forecast to grow by 14% between 2025 and 2030
- Underlying retail demand will remain consistent even as the landscape shifts
- Spending on retail goods accounts for just under a third of total consumer spending
- Graph 3: breakdown of total consumer spending, in value terms by major category as a % of total, 2000-24
- Sales continue to shift away from stores…
- Graph 4: estimated share of total retail sales made via in-store and non-store channels, 2009-2024
- …with this trend particularly hitting non-food categories
- Graph 5: estimated share of total non-food retail sales made via in-store and non-store channels, 2009-24
- In-store sales to grow 10.4% by 2030
- Even by 2030 £6.8 in every £10 spent in retail will come in a store
- Graph 6: forecast share of total retail sales, by in-store and non-store channels, 2025-30
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THE CONSUMER
- Shopping locations visited
- Majority of consumers continue to visit the high-street
- Repertoire of locations visited greater among families
- Graph 7: repertoire of shopping locations visited, by parental status and age of children, 2025
- Locality key to footfall, but shoppers will travel for destination retail
- Building a successful location requires appealing to the needs of locals
- Graph 8: shopping locations visited and visited most often in the last six months, 2025
- Look to the success of garden centres and major shopping centres for inspiration
- Graph 9: shopping location visitation, by average age and household income of visitors in the last six months, 2025
- Reasons for visiting a shopping location
- Mixed-use locations are key for driving footfall
- In-store services can sit at the heart of reviving social shopping
- Youngest shoppers as driven to visit by eating options as store-mix
- Graph 10: “I have visited shopping locations in the last six months to…”, 2025
- Physical retail needs to better understand the pressures on young families
- Solo and social visitation frequency
- Nearly half have solo shopped in the last six months
- Physical needs to focus more on the experience and less on function
- Graph 11: solo versus social shopping location visitation in the last six months, by age, 2025
- Solo shopping the most frequent occurrence…
- Graph 12: frequency of shopping location visitation, by solo/social mission, 2025
- …but social visits can drive volume
- Solo and social visitation drivers
- Convenience is critical no matter the shopping mission
- Graph 13: factors important when visiting shopping locations, by social and solo visitation, 2025
- A split opinion among the youngest generation about foodservice
- Stores need to provide more help for mum and dad…
- …and a chance to rediscover themselves
- Attitudes towards shopping in-store
- Change the narrative around in-store shopping
- Graph 14: responses to the statement “I enjoy shopping online”, 2025
- Graph 15: responses to the statement “I enjoy shopping in-store”, 2025
- Physical should excite, as online leans more toward function
- Shopping has a direct link with personal wellness
- Physical can be the antidote to the infinite scroll
- We need to take safety seriously
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RETAILER ACTIVITY
- The shifting retail landscape
- Online is still where disruption happens first…
- Graph 16: leading emerging retail brands, by growth in customers and growth in spending within the Snoop SpendMapper cohort, 2024-25
- …but it remains important to encourage disruptors into physical
- Destination shopping remains strong, but it is secondary locations which need support
- Physical remains critical for brand building
- Buy in-store, delivered-to-home is coming
- Bringing back the ‘fun’ of physical shopping
- Design spaces for socialising and creating connection
- Services and experiences help cement physical as ‘the best of a brand’
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APPENDIX
- The market
- Consumer spending categorisation
- COICOP classifications
- Forecast methodology
- Forecast methodology – fan chart
- All retail sales: market size and forecast
- All retail sales: market forecast and prediction intervals
- All in-store retail sales: market size and forecast
- All in-store retail sales: market forecast and prediction intervals
- All non-store retail sales: market size and forecast
- All non-store retail sales: market forecast and prediction intervals
- Snoop SpendMapper methodology
- The consumer
- Consumer research questions
- Consumer research methodology
- Abbreviations
- Abbreviations and terms
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