Stagnant Growth: Nick Bubb, RTT Analyst posed the hypothesis, “After a disappointing December, is this a new normal? Are we trending towards 1% growth at best?” with Charles Burton, RTT Economist agreeing that “It’s going to be hard to see much growth in spending. The net effect is still going to be what can best be described as stagnant growth.”
Value remains King: Maureen Hinton, RTT Analyst highlighted: “Value is going to be a very strong message across the board in Q1, which is not just about price, but also quality and relevance.” With ongoing price competition expected in food, retailers are under pressure to defend their market share while managing tight margins.
Natalie Berg, RTT Analyst, highlights that “promotion fatigue has set in, but shoppers aren’t battening down the hatches just yet. Retailers must look to more personalised, real-time promotions to trigger spending at moments of genuine relevance.”
Structural Shifts: Consumers continue to shift how and where they prioritise their discretionary spend. This opens opportunities in areas such as health and wellness and experiential leisure but creates risk for Fashion and Home categories - James Sawley, RTT Retail Banker highlights the “continued and growing threat to UK retailers in 2026 from both pre-loved fashion and from the Chinese e-commerce platforms”.
Market Turbulence: Retailers will be watching closely as the leisure and hospitality sectors face consolidation and failures, with bad rental deals and restructuring pushing businesses into administration – affecting high streets and consumer footfall. Jonathan De Mello, RTT Property Expert believes “in the leisure space; the failures we’re seeing now will be the first of quite a few.
Resilience and Adaptability: UK Retailers who have invested in building resilience and adaptability into their culture and operations are best placed to compete. Mike Watkins, RTT and NielsenIQ commented that, “We should be proud of how good food and non-food retailers are at weathering the storm. Still engaging with the consumer, still reducing operational costs and still able to make good returns for shareholders.”
Innovation and Technology: Technology and retail media are critical battlegrounds. Miya Knights, RTT Technology Analyst “Retailers must double down on technology for efficiency and optimisation, with AI investment focusing on customer experience – searchability and discoverability - and supply chain resilience in order to get ahead.” Innovations such as digital shelf-edge labelling are expected to accelerate in-store tech adoption.
