2024
9
UK Retail Trends – Summer 2024
2024-07-04T11:00:59+01:00
REP48BF3474_8B64_4AA7_9B15_87B1B4B11766
2195
174345
[{"name":"Retail","url":"https:\/\/store.mintel.com\/industries\/retail"}]
Report
en_GB
The steady improvement in consumer confidence seen in the second half of 2023 has stalled in 2024. As of May 2024, 31% of consumers said their financial situation had improved…

UK Retail Trends – Summer 2024

£ 2,195 (Excl.Tax)

Report Summary

The steady improvement in consumer confidence seen in the second half of 2023 has stalled in 2024. As of May 2024, 31% of consumers said their financial situation had improved year-on-year, but 30% said it had worsened, with the majority saying it was about the same. However there is significant polarisation between higher and lower-income households in the level of improvement.

This stasis in the gains made in late 2023 is reflective of retail performance. There was a return to, although low, volume growth (+0.2%) in Q1, but demand has been mixed so far in Q2, with volume decline in both April and May. While inflation has fallen significantly within food and drink, this has not translated into any meaningful volume change for the grocers, while in non-foods, weather disrupted fashion demand and a still tough home market, albeit with early signs of improvement, mean discretionary spending is still constrained.

There is some hope that a likely change in government and a summer of sports could inject some optimism and spending back into the sector. However, while most consumers do expect political change, they are less optimistic about this change improving their situation, meaning it is unlikely we will see any notable shifts in the current pattern of demand until at least Q3 and likely Q4.

Despite a dip in inflation the market remains tough on consumers and retailers alike.

Nick Carroll, Director of Retail Insight

Table of Contents

  1. Key findings

    • A year and a half of real income decline will take time to undo
    • Graph 1: real wages growth, annual % change in wage growth vs inflation, 2019-24
    • Day-to-day financial wellbeing is up, but the recovery has slowed
    • Graph 2: the financial wellbeing index, 2016-24
    • Political change expected but most don't expect a significant change in their standard of living
    • Graph 3: expectations for this year, 2024
    • Retail demand remains constrained despite some improvement in volume performance
    • Graph 4: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • The online market has found its new equilibrium
    • Graph 5: online sales as a percentage of all retail sales, 2022-24
    • Grocery: value growth eases in line with inflation but with little meaningful impact on volumes
    • Graph 6: all grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • Getir leaves the UK but much opportunity exists within rapid delivery
    • Non-food: volume uptick for store-based non-food players
    • Graph 7: all non-food store-based retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • DIY and garden sees recovery although much relies on the summer weather
    • Footwear drives fashion demand in 2023 but experimentation slows
    • Haircare continues to grow strongly with an opportunity for mass-market retailers
  2. Market environment and consumer sentiment

    • Market environment
    • The UK economy exits recession
    • Graph 8: change in UK GDP (real terms), by quarter, 2023-24
    • A year and a half of real income decline will take time to undo
    • Graph 9: real wages growth, annual % change in wage growth vs inflation, 2019-24
    • Political change expected but most don't expect a significant change in their standard of living
    • Graph 10: expectations for this year, 2024
    • Consumer sentiment
    • Day-to-day financial wellbeing is up, but the recovery has slowed
    • Graph 11: the financial wellbeing index, 2016-24
    • Demand is returning, but the situation remains highly polarised
    • Graph 12: "how does your own financial situation compare to how it was a year or so ago?", by household income, May 2024
    • Future financial confidence continued to trend upwards
    • Graph 13: the financial confidence index, 2016-24
  3. UK Retail sales

    • Retail sales performance
    • Early months of 2024 have shown some improvement in volume performance
    • Graph 14: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • A summer of sport could unlock some demand, but the market remains difficult
    • Non-store players outperform market so far in 2024
    • Graph 15: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, by core category, 2023-24
    • The interplay between stores and online
    • Online growth slows as discretionary market remains tough
    • Graph 16: all online sales, value non-seasonally adjusted, year-on-year performance, 2023-24
    • A better performance from online-only sees store-based share of the market fall
    • Graph 17: share of online sales, by type of retail operation, 2021-2024
    • The online market has found its new equilibrium
    • Graph 18: online sales as a percentage of all retail sales, 2022-24
    • Stores lose more non-food demand to online in 2024
    • Graph 19: estimated share of total non-food sales, store versus online and other non-store, 2023-24
  4. Grocery shopping behaviour

    • Value growth eases in line with inflation but at present is causing no meaningful uptick in underlying demand
    • Graph 20: all grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • Getir leaves the UK but much opportunity exists within rapid delivery
    • Gamification in loyalty sees a notable uptick
  5. Non-food shopping behaviour

    • Volume uptick for store-based non-food players
    • Graph 21: all non-food store-based retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • Fashion
    • Strong comparatives and poor weather hit fashion demand
    • Graph 22: all store-based fashion retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • Footwear drives fashion demand in 2023 but experimentation slows
    • Pre-loved demand remains high but platforms working hard to create stock
    • Home
    • Trend in home demand may be about to turn a corner
    • Graph 23: all store-based household goods retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • 2023 was a poor year for the home sector but the summer presents opportunities
    • DIY and garden sees recovery although much relies on the summer weather
    • Health and beauty
    • Health and beauty has a strong May as the holiday season starts
    • Graph 24: all store-based health and beauty retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
    • Haircare continues to grow strongly with an opportunity for mass-market retailers
  6. Launch activity and innovation

    • Key news stories and reaction from Mintel's Retail Team
    • Primark expands click and collect service as profits rise
    • Tamara Sender Ceron, Associate Director – Fashion Retail
    • Tala teams up with Selfridges for its brick-and-mortar debut
    • Tamara Sender Ceron, Associate Director – Fashion Retail
    • B&Q launches energy saving hubs in Manchester
    • Bridget McCusker – Retail Analyst
    • Oh Polly introduces new returns policy to discourage “repeat returners”
    • Bridget McCusker – Retail Analyst
    • Asda launches "Support UK" section on its website
    • Nick Carroll – Director of Retail Insight
    • Tesco launches online marketplace
    • Nick Carroll – Director of Retail Insight
  7. Special focus

    • Most consumers use customer service from a retailer
    • Graph 25: types of customer service used, 2024
    • Resolving problems the most common reason for using services
    • Graph 26: reasons for using customer service, 2024
    • Nearly three quarters experience an issue with customer service
    • Graph 27: issues with customer service, 2024
    • Poor customer service leads to consumer churn
    • There is much scepticism towards AI
    • Graph 28: attitudes towards technology-powered customer services, 2024
    • Retailers look to harness AI for personalised services
    • The human touch can shape how consumers interact with retailers
    • Graph 29: attitudes towards human customer service interactions, 2024
    • Strong interest in solutions that give quicker access to customer service
    • Graph 30: interest in services, 2024
  8. Further resources

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