Retailers unable to move fast enough to navigate rising costs, policy churn and rapid tech shifts

UK retail is facing an agility crisis, with 86% of retailers warning they can no longer adapt at the pace required to keep up with rising costs, policy instability and rapid tech disruption, according to research from business advisory and accountancy firm Menzies.

Its report, based on a Censuswide survey of 500+ senior decision-makers, including 70 leaders from UK retail, reveals that stalled investment, shrinking budgets and internal bottlenecks are leaving retailers unable to seize growth opportunities.

One in five have already missed a major opportunity in the last year because they couldn’t move fast enough, and a quarter admit they are stuck firefighting rather than pursuing new growth.

Financial pressures top the list of threats to business agility, with 29% of retail firms citing cash flow and budgeting difficulties, while 43% highlight inadequate systems and analytics.

Access to new funding is also undermining agility in businesses, where two fifths say limited crowdfunding or community investment opportunities has slowed them down in the last two years, while others point to restricted access to government grants (33%); emergency support schemes (30%); and bank loans (30%) as being increasingly out of reach.

With the autumn budget set for today, businesses also point to gaps in government support as a blocker to agility: a third say clearer rules and guidance from regulators would help them respond to crisis more effectively; 24% cite increased regulation as the biggest threat to their business in the next 18 months; 17% cite the Employment Rights Bill as undermining organisational agility; and a third point to UK economic stagnation.

In the last 12 months, retail firms have cut back on cybersecurity and resilience infrastructure (27%), M&A and partnership deals (26%), AI and digital transformation (24%), international expansion (20%), and new product and service line developments (16%).

But it’s not just about the money, as Menzies’ research shows that people related challenges make up eight of the top ten barriers that respondents believe are blocking agility. One in five are stalling senior strategic hires (20%), wider workforce recruitment (21%) and training and development plans (20%).

Leadership issues weigh heavily, as 41% of retail firms feel ‘faster internal decision-making processes’ would make them more agile, while two fifths cite ‘stronger leadership alignment on key priorities’ as a key focus. 24% say ‘poor communication and collaboration’ is hampering business agility from within - while a quarter point to a continued ‘focus on short-term goals’.

Simon Massey, Managing Partner at Menzies, says: “Right now, too many UK businesses are stuck in ‘wait and see’ mode - waiting for the budget, waiting for the economy, waiting for international politics to settle. But as our research shows, the result is that too many are missing the opportunity to innovate and grow.”

He adds: “Businesses can’t control what’s going to be in Rachel Reeves’ red box, but they can control how resilient, agile and prepared they are for whatever may be around the corner. There’s no secret to business agility, but it’s near impossible if a business doesn’t have a clear destination and a direction of travel understood by every level in the organisation.”

RTIH AI in Retail Awards

RTIH proudly presents the first edition of its AI in Retail Awards, sponsored by 3D Cloud and EdTech Innovation Hub.

This is now open for entries. Deadline for submissions is Friday, 5th December. It’s free to enter and you can do so across multiple categories.

Check out categories and entry forms here.

As we witness a digital transformation revolution across all channels, AI tools are reshaping the omnichannel game, from personalising customer experiences to optimising inventory, uncovering insights into consumer behaviour, and enhancing the human element of retailers' businesses.

With 2025 set to be the year when AI and especially gen AI shake off the ‘heavily hyped’ tag and become embedded in retail business processes, our newly launched awards celebrate global technology innovation in a fast moving omnichannel world and the resulting benefits for retailers, shoppers and employees.

Our 2025 winners will be those companies who not only recognise the potential of AI, but also make it usable in everyday work - resulting in more efficiency and innovation in all areas.

Winners will be announced at an evening event at The Barbican in Central London on Thursday, 29th January. This will kick off with a drinks reception in the stunning Conservatory, followed by a three course meal, and awards ceremony in the Garden Room.