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Retail & Leisure Outlook Report 2024


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Download our Retail & Leisure Outlook Report 2024 (preview) to learn about key retail trends and insights for next year!

This report is a must read for anyone in retail or leisure (or associated industries) in order to deeply understand the drivers of consumer spending and behaviour, and what trends retailers need to be aware of in 2024 to survive ongoing disruption. We'll email you the full report version as soon as it's published.


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  • Foreword

  • Section one: The Big Picture

  • Section two: Megatrends for 2024

    • Trend one: Sustainability & ethical consumption

    • Trend two: Generative AI & the tech revolution

    • Trend three: Omnichannel reality

    • Trend four: Disruptive models

    • Trend five: Navigating in a permacrisis

  • Section three: The Outlook for 2023

    • Consumer trends & forecasts

    • Business trends & forecasts

    • Future trends to watch out for

  • About Retail Economics


Retail outlook for 2024

Section one: The Big Picture

As we approach 2024, the UK finds itself at a critical juncture. The nation has navigated successive waves of disruption, continuing to feel the impacts from the pandemic, geo-political instability and the ongoing effects of the cost-of-living crisis. With interest rates remaining at decade-highs, fragile consumer confidence and the prospect of a general election sets the scene for heightened uncertainty against a backdrop of ongoing business and consumer caution. Nevertheless, there is room for optimism.


Inflation is falling fast, the labour market remains robust, and the consumer sector has performed stronger than many had predicted. The worst of the cost-of-living crisis has now passed, and fears of a deep and prolonged recession have largely faded.

Businesses managing to pivot their proposition to focus on value have outperformed the market; gaining market share and winning new customers.

In the final report, this section will focus on the key economic factors impacting the prospects for the consumer sector.


We will dissect these main components to set the stage for our outlook for 2024 which are likely to include the following areas:

Macro outlook: The outlook for economic growth, inflation and the labour market and its potential impact on retail and leisure spending.


Wage growth and employment: The labour market has remained resilient, but wage growth is expected to soften as unemployment rates rise. This section will look more closely at the squeeze on household spending power and focus on the outlook for 2024.


Housing market and interest rates: The Bank of England's monetary policy will play a pivotal role in the outlook for consumer spending power and confidence. Any changes in interest rates will directly affect consumer loans and mortgages, influencing discretionary spending. We will take a look at the current and future strength of the housing market, and the impact of interest rates on mortgage repayments.


Government policies: Fiscal measures like tax cuts or increases have a direct bearing on disposable income. Also, there will be increasing focus on government policy as we near an election.


Consumer confidence: Importantly, confidence is expected to remain fragile as high interest rates, a weakening housing market and lacklustre economic growth creates an environment of caution. Here we’ll explore consumer confidence in detail and look at the key drivers.


Global factors: From trade wars to oil prices, global events can have a trickle-down effect on the UK market. The current geo-political arena remains a key concern to global shocks with the Russia-Ukraine (Israel-Palestine) conflict still looming over commodity prices and supply chains.



retail outlook 2024

Section two: Megatrends for 2024

The retail and leisure landscape is not merely evolving in 2024 - it's undergoing a transformative shift. It’s being driven by a series of mega trends that are redefining many aspects of the sector. These trends are set to shape consumer behaviours, business models, and the broader retail ecosystem in profound ways.


The past year has provided a glimpse into the future, with digitalisation surging to the forefront, sustainability transitioning from a niche concern to a mainstream imperative, and global economic dynamics exerting palpable influence on business operations. From inflationary pressures to interest rate dynamics, the economic backdrop plays a pivotal role in shaping the trajectory of these transformative forces.


Yet, beyond the numbers and forecasts lies the human element—the evolving consumer. Today's consumer is more informed, more discerning, and more connected than ever before. Their expectations are reshaping retail and leisure, driving demand for personalised experiences, ethical practices, and seamless integration between the digital and physical realms. The rise of e-commerce, the push for sustainability, and the integration of cutting-edge technologies like AI are not isolated phenomena; they are characteristic of broader mega trends that are intertwined and mutually reinforcing.


This section delves deep into these megatrends, offering a panoramic view of what 2024 holds for UK retail. It draws upon a wealth of data, insights, and forward-looking analysis to support business planning, strategy development and many other aspects of retail and leisure operations.


Trend one: Sustainability & Ethical Consumption

The modern consumer is becoming increasingly environmentally and ethically conscious.

This continued trend is pushing retailers to adopt more sustainable practices, from sourcing to packaging. Brands that align with these values, emphasizing ESG (Environmental, Social, and Governance) principles, are likely to witness enhanced loyalty and market share if communicated correctly.

This section will explore sustainability and ethical consumption, a theme that will only become more prominent as we look toward the future.


Trend two: Generative AI & the Tech Revolution

Generative AI is emerging as a standout force above all other mainstream technologies.

The technological undercurrents shaping the retail and leisure sector are becoming increasingly dominant as the necessary computing power is becoming more accessible.

This cutting-edge technology, capable of creating content, designing products, and predicting consumer behaviours, is set to revolutionise retail and leisure experiences in ways yet unimaginable.

Drawing insights from our research, it's evident that the fusion of AI with business operations is more than just a megatrend – it’s a complete shift that will disrupt many industries and present new opportunities.

Retail and leisure brands poised to harness the capabilities of generative AI stand at the cusp of unprecedented innovation, offering bespoke solutions and experiences that were once in the realm of science fiction.


Trend three: Omnichannel Reality

Getting omnichannel right within the retail and leisure customer journey is exceedingly challenging for many – but getting it right offers significant rewards.

The evolution of omnichannel is being driven by the increasing complexity of the customer journey, blending online and offline experiences across multiple platforms and devices.  From the rise of online channels in hospitality to the burgeoning experience economy, the boundaries between digital and physical retail are increasingly blurring as technology affords greater opportunities.

For example, social commerce (powered by influencers on platforms like TikTok) is reshaping purchasing behaviour, while the connected customer journey emphasises a harmonised approach across touchpoints.

Here we take a look at how the resurgence of in-store experiences, supported by advanced technologies like Generative AI and digital wallets, is redefining the purpose of brick-and-mortar establishments among other issues.


Trend four: Disruptive Business Models

The retail and leisure sectors are experiencing significant disruption from innovative business models that are challenging the status quo at every turn.

The ascendancy of marketplaces and direct-to-consumer strategies are not just alternatives but game-changers. They will continue to disrupt and reshape traditional operating paradigms as we head into 2024 and beyond.

Dynamic pricing, sophisticated subscription models, and specialised online marketplaces are capturing the attention of consumers in new ways.

Amidst this transformative backdrop, we look at the range of factors that are driving innovative thinking in these areas and how businesses can leverage alternative business models to their advantage.


Trend five: Navigating a Permacrisis

Looking back at the last three years, the retail and leisure sector finds itself navigating a 'permacrisis' landscape, characterised by a series of prolonged and overlapping challenges.

From the lingering effects of the Covid pandemic to mounting geo-political instability, businesses are grappling with unprecedented uncertainties. The looming shadow of higher interest rates, corporate distress, and a potential debt bubble further complicate the scenario.

In this tumultuous environment, the concepts of resilience and agility have emerged as paramount. Business need to deeply understand the associated risks and manage risk as effectively as possible.

In this section we take a look at the key crisis points for businesses to be aware of and urge them to integrate intelligent risk management strategies into their planning for 2024.

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retail outlook 2024

The Outlook for 2024

To date, the retail and leisure sectors in 2024 are poised to experience a year marked by dichotomies.

On the consumer front, the year is anticipated to be a tale of two halves: from grappling with the cost-of-living crisis to a gradual recovery in certain parts of the economy. Spending patterns are expected to polarise, with a temporary pause in sustainability-driven purchases in various categories as the year commences; followed by a gradual shift back towards online.


Businesses, on the other hand, will delve deeper into digital sophistication, highlighting the leaders from the laggards. The quest for profitability will drive continuous cost-cutting initiatives, as particularly seen with many larger UK retailers back in 2023.


Simultaneously, the exploration of generative AI, strategic 3PL partnerships, and the rise of marketplaces will redefine business models. The concept of 'Retail as a Service' will gain traction, while data governance, security and privacy will remain at the forefront of operational strategies following a significant spate of cyber-attacks.


This section explores both consumer and business trends and provides forecasts, followed by a snap-highlight for trends to watch out for towards the back end of 2024 and beyond.



Outlook for 2024: Consumer trends & forecasts

Navigating through the retail and leisure landscape in 2024 will likely see consumers experiencing a year marked by stark contrasts.

The shadows of the cost-of-living crisis are expected to loom large in the early phases, potentially dampening discretionary spending. Yet, as the year advances, signs of a bounce-back are forecasted. This will rejuvenate consumer optimism to some degree.


This transformative period will likely see polarised spending patterns, with some segments becoming more frugal and others indulging more freely. While the sustainability movement has been a cornerstone of recent consumer behaviour, a brief hiatus in eco-driven purchases is anticipated.


Concurrently, the pull of e-commerce is set to strengthen, and will cause a readjustment in behaviour in certain categories.


This section will delve deeper into the consumer side and provide necessary forecasts to help businesses better plan for another disruptive year ahead.



Outlook for 2024: Business trends & forecasts

For many businesses in 2024, the year will likely highlight their key strengths and weaknesses, as well as their adaptability and foresight.

The digital divide is widening, with a clear polarisation between digital frontrunners and those lagging behind. Brands like M&S and Next are setting precedents in safeguarding profitability through relentless cost-cutting measures.


The exploration of generative AI promises to redefine customer experiences, while the rise of third-party logistics underscores the importance of strategic partnerships [extract].



Outlook for 2024: Future trends to watch out for

As we gaze beyond the 2024 horizon, the retail and leisure sectors continue their march towards unified commerce where digitally-connected touchpoints ‘communicate with each other’ across the entire retail value chain.

Technological innovation and evolving consumer expectations will drive new ways of doing things. Creative use of AI and data science will make a profound impact within many operations.


Dynamic pricing, powered by real-time data analytics, promises to revolutionise the way retailers set and adjust prices. The rise of social shopping, blending the lines between social media and e-commerce, will likely be a key theme towards 2025.


The allure of frictionless checkouts, epitomised by models like Amazon Go, offers consumers unparalleled convenience. Meanwhile, AI-driven discovery tools are poised to usher in a new era of personalised shopping, tailoring product recommendations and messaging with unprecedented precision amongst other functions.


retail outlook 2024


We hope you found this article interesting. For more insights and industry analysis be sure to connect with us.


About this report

This "Retail & Leisure Outlook Report 2024" is published by Retail Economics. The insight contained is critical for industry professionals operating in the retail, leisure and related industries for strategic planning, forecasting and to better navigate the ongoing disruption and  structural shifts with the sector. Complete the form at the top of this page now to secure your free copy. 


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