The retail sector is the true barometer of economic conditions with changes in consumer buying behaviours and conditions being reflected instantaneously in their purchases.
It is a truly dynamic sector with numerous challenges but also significant opportunities to develop and grow.
John Nyhan & Niall Kearney, from KPMG’s Rapid Performance Improvement team, explore 4 key areas for retailers to examine to drive value creation.
In 2025, Irish retailers face challenges such as rising operational costs due to inflation, supply chain disruptions, and increased competition from e-commerce. Shifting consumer expectations for sustainability and personalised experiences also add pressure. Additionally, labour shortages, adapting to digital transformation, and maintaining profitability while meeting regulatory requirements present ongoing difficulties in an evolving retail landscape.
The recent KPMG Next Gen Retail series, which analyses the results of independent research, highlights that consumer attitudes are changing, while habits on the other hand, are staying the same.
Of those surveyed, 87% still purchase groceries in-store, while only 29% intend to increase their online shopping in the coming year. Large shopping centres are still preferred by 43%, and 62% enjoy the ability to see and feel products in-store before buying. This positive sentiment echoed by consumers support the view that in person business is here to stay.
Business offerings, however, need to adapt. Businesses are now expected to deliver higher quality at lower costs, with 66% of Irish retail customers believing business should focus on customer satisfaction rather than cost cutting. Indeed half say they are willing to pay more for quality.
Additionally 47% feel that cost cutting measures negatively impact their shopping experience. Recognising these changing demands while understanding that existing models may not need a complete overhaul presents a unique opportunity for growth and innovation.
In such a challenging operating environment, businesses must focus on the areas they can keep control of. Consistently, examining 4 key areas presents value creation opportunities and helps businesses to improve their operations.
By focusing on these areas’ businesses can drive sustainable growth while meeting the demands of modern consumers.
The 4 areas are:
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