RETAIL
Impact of NI and wage increases likely to reduce construction orders
The retail sector in Q1 2025 is preparing for big rises in business costs which will come into force in April 2025 with National Insurance and National Minimum Wage increases.
This is likely to feed through to reduced construction orders in 2025/26 and may lead to store number reductions as retailers look to reduce costs and rightsize their estates, especially those with strong e-commerce elements to their business. Initial impacts of the requirements of the Building Safety Act are also still feeding through to budgets where legacy building and estate issues continue to weigh down budgets.
Related development continues to be increasingly driven by the need for flexibility, sustainability and the integration of technology, with the ultimate aim of creating stronger demand and higher occupancy rates in the future.
Looking ahead, the sector is continuing to be dominated by the consumer cost of living crisis and lingering high interest rates. Christmas 2024 offered a mixed bag of results in the sector, with few overall winners, which will hinder business planning and investment over the next 12 to 18 months, particularly for those weighed by private equity driven investments.
INSIGHT
The future of retail spaces: Adapting to the hybrid shopping experience
The retail industry is undergoing a profound transformation, driven by the convergence of physical and digital experiences. As hybrid models gain traction, retailers are seeking innovative ways to create immersive and convenient shopping environments.
