UK Retail Industry Statistics and Trends

The retail sector in the UK made almost half a trillion in sales in 2022, including fuel sales. Even without fuel, the figure is remarkably high at £441.17 billion.

UK online retail industry statistics forecast a growth rate of 5.3% in 2024. Online retail shows a somewhat better growth rate compared to total retail sales, which are projected to grow at a rate of 4.8%.

The official data on retail sales in the UK show that between October 2022 and October 2023, the average ecommerce share of total sales remained pretty consistent. The increase in this ratio that happened in 2020 remained, reaching almost 7 percentage points.

The UK retail industry saw another drop in overall sales in October 2023, 2.7% less compared to the same month the year before. This is a stronger decrease compared to market forecasts of -1.5%. The cost of living crisis forced UK consumers to focus on saving money, and looking for discounts, rewards, and cashback accounts for certain purchases.

A 10.4% drop in sales hit alcohol and tobacco stores as Britons cut on non-essentials. However, while it may positively impact people’s health to cut down on these types of products, the overall trend of cutting costs on non-essentials affected other stores as well. Another affected sector is specialist food stores such as bakeries, butchers’, and sweets shops which saw a drop of 4.2%.

In the UK, almost five million people make up the retail and wholesale sector workforce. In 2023, the figure reached 4.9 million.

Although ecommerce plays a significant role in the UK retail industry, supermarket franchises are still at the top of the market chain. It’s followed by Sainsbury’s with £28.1 billion in 2022/2023. Here’s an overview of the top ten:

Tesco is the largest of the Big Four, which together with Sainsbury’s, Asda, and Morrisons makes up over 60% of the UK grocery retail market. This are the largest grocery retailers according to market share:

While the above numbers focus on a limited period in 2022 and 2023, the full stats for 2022 show Amazon is at the top regardless. In 2022, the online giant had £30.07 billion in revenue in the UK, a drop from the previous year when it exceeded £31.91 billion.

An Insider Intelligence report shows different forecasts for the nine biggest online retailers in the UK. On the one hand, there’s Amazon’s forecasted growth rate of 6.8%, followed by Sainsbury’s at 5.9%. On the other hand, the report forecasts Boohoo to drop by 9.4%. This is what the projection looks like against the forecasted rate of 5.3% for the entire ecommerce market:

Non-store retailing refers to all non-store sales: mail order, vending machines, telephone, door-to-door, and online retailing. It has a 90.7% share of all online sales. This is what the rest of the online market looks like according to sales:

The food retail sector is also expected to grow in the following years. UK retail industry statistics show that the sector expects to reach £241 billion by 2027. 88% of UK shoppers most frequently bought in supermarkets, while online retail took the second place in the survey with 27%.

The pandemic and the cost of living crisis impacted the fashion retail industry visibly. At £38.3 billion, the sales in 2020 were the lowest since 2008, and the numbers for the retail industry show it took until 2022 for the sector to recover, even though the figures for the year were still slightly below 2019 sales.

When it comes to using AI in the retail industry, a survey reveals that 22% of retailers currently use AI for supply chain forecasting, while 17% plan to invest in 2024. In contrast, 27% have no investment plans, and 24% are interested but undecided, indicating a cautious yet intrigued stance toward AI integration in supply chain strategies.

Despite worries about inflation, 54% of retailers foresee a 'slightly higher' year-on-year sales, with an extra 20% anticipating 'much higher' sales. This signals a positive change from the previous year and highlights the industry's ability to withstand economic challenges.

Meanwhile, 66% expect store figures to remain constant or decline in the overall mix. Looking three years ahead, 75% project sustained or heightened online activity. Additionally, 63% predict store metrics to remain steady or decrease.

The most common technologies used in the retail industry are collaboration platforms with 92%, mobile devices for operations 78%, and intranets for communication 70%. However, only 32% have dedicated task management software, and 49% lack voice communication and headsets in stores.

59% of UK shoppers would pay more for major purchases if the product was sustainably produced. Sustainability also plays a role in how consumers see everyday purchases — 48.4% say they would pay more if the products were sustainable.

Delivery trends show 83% of retailers provide next-day fulfillment, 46% offer buy-in-store and deliver to home, and 41% have named-day fulfillment. In the future, 32% foresee increased demand for eco-friendly delivery in 2024. Additionally, 29% anticipate a rise in demand for next-day delivery, and 27% expect an increase in same-day delivery demand.

Despite ecommerce growth, 2024 focuses on new stores and refurbishments, with 50% of retailers prioritizing physical investments. For example, Jigsaw, with 46 sites, plans more stores, underscoring the importance of surprising and delighting customers in physical spaces.

The survey reveals that 20% of businesses express interest in retail park locations. Additionally, 24% plan to grow in local high streets or secondary and tertiary locations, showcasing diverse store expansion strategies and preferences.

The retail industry report shows that in 2024, retailers will prioritize brand messaging and marketing, with SEO and email marketing leading at 93%, followed by Facebook at 0% and Instagram at 85%. Last year, PPC, SEO, Instagram, and email marketing were key channels, but this year, PPC and affiliate marketing also stand at 83%.

According to the survey by World Retail Congress, international expansion emerges as a top-three investment area for numerous retail leaders in 2024. Primark boasts a thriving international presence, with approximately 230 of its 430 stores located outside the UK and Ireland.

The report shows retail businesses intending to expand are eyeing these two key areas. Avon's omnichannel strategy includes an ambitious plan to double its 50 stores in Turkey by 2024. At the same time, the US retail market, with a projected growth between 4 and 6% in 2023, presents a lucrative opportunity for UK retailers.

Omnichannel is one of the most important retail industry trends in 2024. It focuses on providing customers with a seamless, unified experience throughout channels, from brick-and-mortar to online and mobile sales. Here’s the type of format retailers expect to be successful in the next two to three years, according to the percentage of retail executives who say so: