It is raw economics that is shaping the consumer and retail experience. It is an industry grappling with a vicious cycle. The profitability of online is weak at best, so firms have attempted to shore up margins by introducing “costs of convenience”, bringing in charges for returns and delivery slots. Whilst this helps margin it is stifling growth which, in turn, is reducing the economies of scale of the online channel.
"Whilst demonstrating resilience in a difficult economic environment, shoppers are continuing to spend. They have, however, changed their purchasing habits, they are buying less or buying cheaper. They are buying “better value” (cheaper items) and buying more promotional items, shopping at lower-cost retailers or buying brands that cost less."
Duncan Knight, Partner, Customer & Operations Consulting – Consumer & Retail
Consumer and retail
The shift online has weakened, high levels of inflation mean costs have escalated, shifting consumer demands and loyalty in the wake of rising prices have driven an intense focus on margins.
Read the sector overviewGrocery retail companies in the UK top 100
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Ocado
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M&S Food
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Waitrose & Partners
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Aldi
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Sainsbury’s
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Farm Foods
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Lidl
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Tesco
Source: Based on the views of 13,143 consumers in the UK CEE 2023 research
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