Reflecting on 2024 and Looking Ahead at 2025: Consumer
Reflecting on our 2024 Predictions
As we look back on our predictions for 2024, it’s nice to see that many of our forecasts were spot on. The cost-of-living crisis did persist, but inflation eased and wages slowly rose, creating a more optimistic climate. Grocery retailers reported strong festive trading periods, and both Artificial Intelligence and Sustainability gained even more importance among consumers, organisations, and individuals.
However, the ‘Out of Home’ and Hospitality sector didn’t quite reach the anticipated levels of growth or return to full strength. Despite this, the War for Talent continued fiercely, with employers working hard to attract and retain high-calibre individuals and future industry leaders.
Overall, 2024 was a positive year despite some inevitable challenges.
Predictions for 2025
As we look ahead to 2025, several key trends and developments are expected to shape the Consumer sector. Here are some of our predictions…
Economic Outlook
Economically, 2025 is anticipated to see a slight rise in inflation. However, this increase is expected to be modest, with many economists predicting 1-2 further interest rate cuts. These adjustments should help stabilise the economy and provide some relief to both consumers and businesses.
Artificial Intelligence
Artificial Intelligence (AI) will continue to gain significance and become more integrated into everyday consumer experiences. AI-driven technologies are expected to further enhance customer engagement and drive sales growth. For instance, e-commerce platforms that leverage AI for personalised recommendations could see substantial increases in average order values. The continued evolution of AI will likely lead to more sophisticated and intuitive consumer interactions.
Sustainability
Sustainability will remain a critical focus for all stakeholders in 2025. Despite some challenges, the importance of sustainable practices will only grow. Companies will need to prioritise eco-friendly initiatives and transparent supply chains to meet consumer demands and regulatory requirements. This ongoing commitment to sustainability will be essential for long-term success and environmental stewardship.
Merger & Acquisition Activity
The trend of significant Merger & Acquisition (M&A) activity in the UK Consumer market is expected to continue in 2025. Various Consumer sub-sectors will likely see increased consolidation as companies seek to strengthen their market positions, expand their product offerings, and achieve greater operational efficiencies. This M&A activity will drive innovation and competitiveness within the industry.
Health and Environment
Health and environmental concerns will be more prominent than ever in 2025. The government and consumers will focus on ultra-processed and high-fat, sugar, and salt (HFSS) food and drink products. There will be increased scrutiny on the health impacts of these products and their production methods. Additionally, the environmental effects of food production will be a significant consideration, driving demand for healthier and more sustainable options.
War for Talent
The War for Talent will remain a key challenge in 2025. Employers will need to work harder than ever to attract and retain high-calibre individuals and future industry leaders. This will involve offering competitive compensation packages, fostering inclusive and supportive workplace cultures, and providing opportunities for professional growth and development. Companies that succeed in these areas will be better positioned to thrive in a competitive market.
Overall Outlook
In summary, 2025 is expected to be a positive year for the Consumer sector. Despite some external challenges and media negativity, there are many encouraging developments on the horizon. The year could bring positive, cautious optimism as the industry continues to adapt and innovate. With a focus on economic stability, technological advancements, sustainability, and talent retention, the Consumer sector is poised for growth and success.
