Retail Horizon 2024 Consumer report: How shoppers are feeling – and how retail should get ready – for the year

Now in its fourth year, we have divided the flagship Retail Horizon content into a series of four reports that will be released throughout November.  

Retail Horizon 2024 Consumer analyses how consumers are feeling about their spending habits for next year and what retailers should do to prepare now as we anticipate another shift in behaviour. 

Our findings are based on research with 2,000 consumers, conducted by Retail Week and Walnut Unlimited in October 2023, to discover how consumers are feeling about their shopping habits now and going into 2024.  

Our Retail Week analysts also considered the changing economic environment, to see where opportunities lie and how retailers should prepare for the year ahead. 

Subscribers can read the full Retail Horizon 2024 Consumer report today.

Summary of consumer survey findings

The past year has been characterised by a difficult environment with rising inflation, economic uncertainty and a cost-of-living crisis.  

In this context, it is natural that consumers are hesitant to feel too much optimism for improvements in 2024. Our data found 24% of shoppers expected to be better off in 2024 but 31% expect to be worse off. Men and younger age groups tended to be the most positive and there were also differences depending on location. 

It is clear that price will remain a differentiating factor in where to shop and this will be the case at the beginning of the year especially. 

Key trends for 2024 

• Widening wealth gap 
• Unlocking opportunity 
• Mindful spending 
• Personalised experiences 
• Working harder 

Widening wealth gap

The cost-of-living crisis in the UK has polarised consumers into distinct groups, with some much more heavily impacted than others.  

Adapting to rapidly changing shopper needs will be a significant task for retailers in 2024. In particular, tapping into opportunities to influence the spending decisions of middle groups such as positive flexors and secure savers, while supporting those that are still struggling. 

The extent to which customers have traded down and turned to the discounters amid cost-of-living pressures is evident from our survey. In September 2023, 54% of shoppers said they consider value retailers every time or often when they shop. This compares to 58% in 2022. Consumers consider discount and value retailers across all sectors but particularly for groceries (87%) and fashion (57%). 

Unlocking opportunity

Although consumers may not be feeling the full effect yet, consumer confidence has been on an upward trend since September 2022. As food prices fell for the sixth straight month in October 2023, according to the BRC-NielsenIQ Shop Price Index, there is every sign this trend will continue throughout 2024 as inflation eases. 

Retailers should be preparing strategies in readiness for changing shopper needs as 2024 progresses, anticipating rising levels of discretionary spending and some switching away from discounters as financial pressures ease.  

Growing confidence will bring a desire for newness with wealthier households seeking innovative new products and brand differentiation.  

Extending product lifecycles and engaging eco-conscious shoppers

Retailers that take a lead on sustainability will have a strategic advantage. Our research found 58% of consumers stated a preference for buying more sustainable products, even if they are more expensive. 

Circular business models will flourish, particularly where these keep choices simple for customers. The rise of consumer-to-consumer selling platforms including Vinted, Etsy and Depop demonstrates a growing appetite among shoppers for sustainable purchasing options to limit their carbon footprint.  

Working harder

More than a quarter of participants in our survey told us that they increased the number of hours they work as a result of their financial situation.  

Retailers must be mindful of these pressures on employees’ work-life balance and know any measures implemented to support them will be welcomed.  

For consumers, 74% of shoppers expect retailers to lower their prices to reflect any decrease in inflation in 2024.  

As consumers work harder, so must businesses.