Inflation, geopolitical conflicts and rising operating costs are the factors that have most affected the retail industry for several years. Still, according to the State of Retail 2025 report, many retailers are looking to the future with optimism. More than 40% of them believe that the ongoing year will be better than the previous one – that’s 15 p.p. more than those expecting a worse situation [1]. How to turn positive forecasts about the retail industry into real business benefits?

Retailers rate 2024 as average

According to the State of Retail 2025 report, the previous year was a difficult one for retailers. Only one in four store owners considered the situation in the industry to be very good or good. As many as 32% described it as poor, while 41% described it as average.

What made the previous year challenging for retailers?

The main reason is inflation, which, on the one hand, has contributed to increased operating costs for companies, while on the other hand, has caused customers to seek savings. In addition, consumer behavior has been, and continues to be, affected by the unstable geopolitical situation in the world, most notably the ongoing war in Ukraine since 2022.

Is the retail industry going for the better?

Despite the pessimistic mood of the previous year, many retailers expect the retail industry to improve, a view held by more than 40% of those surveyed. One in three expect no change in 2025, while 25% think things will be worse.

It is not only retailers who are looking at 2025 with a little more optimism. CSO data confirms that there is a slightly better perception of the situation by customers as well. The current consumer confidence index, which takes into account the assessment of changes in the financial situation of the household, changes in the overall economic situation of the country and the current making of important purchases, stood at -14 in 2024. Although the negative number indicates the predominance of consumers with a pessimistic attitude, it is noteworthy that the value of the index is the highest since 2020 [2].

The situation is similar for the advance consumer confidence index, which represents the expected assessment of changes in the next 12 months. At the end of 2024, it stood at -8.7 and was also the highest since the outbreak of the pandemic.

Will 2025 actually turn out to be a happy year for retail?

Although data shows that the situation in the retail industry in 2025 may be slightly better than last year, the actual improvement depends largely on the retailers themselves. Inflation, the rising cost of living and changes in consumer habits are situations to keep in mind when shaping sales strategies in the near term.

What should retailers pay special attention to?

  • Saving money makes customers more willing to take advantage of promotions and discounts. The solution to the problem, however, is not to simply lower the price, but to build a promotional basket in which products at an attractive price increase sales of other products of lesser interest. For this, however, you need the right technology, such as the iXpos system, which allows you to build even the most complex promotional terms.
  • More and more consumers are shopping online. The Internet is no longer just for buying clothes, cosmetics and other accessories – customers are also buying groceries online. For retailers, this means the need to increase e-commerce and m-commerce activities.
  • Digital transformation is a necessity today. Adapting outdated systems to modern challenges, legal changes and technology involves costly integrations. The store should therefore be equipped with a modern sales system that will enable the implementation of such activities as retail analytics, sales process automation and ongoing inventory monitoring.

Want to modernize your retail business and increase your chances of success in the coming years? Contact us – INEO specialists will be happy to tell you how the iXpos system can impact your business.

Sources:

[1] State of Retail 2025 Report – Retail Barometer

[2] CSO, Consumer Conjuncture – December 2024.