With shoppers keeping a close eye on their finances, 2024 could be set to be another turbulent year for retail.
However, there will be winners and losers across the sector with market conditions favourins some businesses and smart strategic moves setting others apart.
Retail Gazette speaks with experts in the industry to hear their predictions of which retailers will rise and fall during 2024.
Susannah Streeter
Head of money and markets
Hargreaves Lansdown
Winner: Marks & Spencer
“Marks and Spencer is on a roll and looks set to continue to be a winner in 2024. It’s food division saw volume growth outpace all other mainstream food retailers in recent months and clothing has fallen firmly back in fashion. At the premium end of the market core customers are more insulated from cost-of-living headwinds which offers added resilience.”
Loser: Superdry
“Superdry has been facing tough times and 2024 doesn’t look like it’s going to be an easier ride. Its trading performance has been significantly below management expectations.
“An efficiency drive is underway but it’ll take time to reap rewards. Spend has been reduced on marketing which won’t help in a challenging market, especially with economic headwinds still swirling.”
Nick Bubb
Retailing analyst
Winner: Currys
“It has been a tough year for big ticket retailers in the UK, given the big hike in interest rates, so Currys has struggled in 2023, but the pressure on sales and profits was compounded by an unexpected surge in competitive pressure in the Nordics business, which used to be the jewel in the group’s crown.
“But margins are now recovering in the Nordics, which augurs well for 2024 and Christmas trading should be stronger in the UK, given the likely downtrend in interest rates and mortgage rates.
“By the end of 2024, Currys could also be benefiting from an unwinding of the product replacement cycle, as the lockdown boom in laptop and home office sales starts to recede in the memory. So, all round, 2024 looks like being a much better year for the group.”
Loser: Boots
“Boots was one of the winners of 2023, benefiting from the continuing strong recovery in health and beauty sales post-lockdown.
“But winners can often lose momentum and, although the recovery enjoyed by Boots has been strong enough to prompt renewed plans by Walgreens to float the business on the London stockmarket, potential investors will need to be sure that there is an underlying growth story, beyond post-Covid recovery and a belated push to catch up online.
“The trading comps will be tougher in 2024 for Boots and the long-term structural issue of under-investment in the store estate may be exposed. So, 2024 may not prove to be as good a year for Boots, just as its ownership changes again.”
Patrick O’Brien
Research director
GlobalData Retail
Winner: Uniqlo
“Opening new flagships in London and Edinburgh (its first in Scotland), Uniqlo has been in the UK for some time and while its initial investment here did not go to plan, it has persevered, and looks to be on the up now. It is resonating with consumer demand for highly versatile clothing, delivering better quality at its price points than its competitors.”
Loser: Wayfair
“Wayfair has always struggled with profitability, needing to constantly spend on advertising in order to win customers, and can’t rely on returning customers with such an infrequent purchase type. The home furnishings market looks like it had a very challenging Q4, and we would not be surprised if Wayfair decided to cut its losses and leave the UK in 2024.”
Kate Calvert
Head of retail and consumer research
Investec
Winner: WHSmith
“WHSmith should benefit from the ongoing recovery in global travel post Covid.
“It has continued its excellent track record in winning new contracts post Covid with landlords liking WHSmith’s ability to tailor its offer to their requirements with its multi-format, multi-branded approach.”
Loser: Superdry
“Superdry has had a torrid time recently, struggling to re-invigorate the brand and reverse a declining sales trend since pre-Covid. The challenging consumer environment and warmer weather has not helped as the brand is known for its outerwear. Turnarounds are notorious for taking time and the company is unlikely to return to profit near term.”
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