What: Retail sales are expected to grow amid economic challenges, with a focus on technological investments and strategic purchasing.

Why it is important: The resilience of consumer spending, despite high borrowing costs and inflation, suggests a cautious optimism for retail growth. This trend underscores the significance of leveraging technology and adapting retail strategies to meet the evolving preferences and financial constraints of consumers.

Despite the hurdles of high borrowing costs and inflation, the retail sector witnessed a 3.2 percent increase in sales for the year ending December 2023, buoyed by a strong job market and wage growth. This growth, albeit modest, signals a potential shift in consumer behaviour towards more purposeful purchasing, with technology playing a pivotal role in shaping the future of retail. As consumers navigate through tightened credit conditions and a cost of living crisis, discount retailers are poised to see notable sales increases, thanks in part to changes in online shopping policies. However, the retail landscape also anticipates strategic store closings alongside expansions, indicating a net reduction in physical retail spaces in 2024. Retailers are increasingly investing in technology to enhance customer service and efficiency, with artificial intelligence emerging as a tool for personalising shopping experiences. This strategic focus on technology and purposeful merchandising aims to foster brand loyalty and address the operational challenges posed by a fluctuating workforce and consumer spending constraints.

Retail sales growth expected amid challenges, emphasis on tech investments and purposeful purchasing