The retail industry – comprising everything from groceries to clothes to homewares and furniture – is one of the stronger, and seemingly bulletproof industries out there. But is all as it appears? Is online shopping cannibalising brick and mortar stores?
We look at how retail performed in 2024 and what the experts expect to see in 2025 and beyond.
Current reality of retail
Retail in Ireland was significantly impacted by high inflation and high utility costs throughout 2023, impacting both consumers and retailers, says Scott Frisby, head of strategy, Elavon Europe. “However, in 2024, the easing of inflationary pressure in both product pricing and utility costs has helped improve consumer spending.
Making products that are more relevant, more efficient and run smoother with less energy consumption
How your KitKat break is helping cocoa-farming families close the living income gap through an innovative programme
Renewable gas will power Ireland’s decarbonised future
All aboard: Ten great things to see and do in Heritage Week
“More recently, the weather in Ireland continues to often be cited as a driver behind spending, as spending in Irish grocery stores recently increased despite poor weather early in the summer.”
Beyond the ticket purchase itself and entertainment venue tailwinds, retailers in Ireland near event venues have also likely benefited from many high-profile events throughout the summer including concerts from Taylor Swift, Shania Twain, Longitude, the GAA All-Ireland championships and Pride, says Frisby.
The retail landscape in Ireland is constantly evolving, with a significant shift towards ecommerce and digital solutions, agrees Colette Devey, EY Ireland consulting partner and consumer sector lead. “Ireland’s retail sector has shown resilience and adaptability, with many retailers expanding their online presence to stay competitive.
Global comparisons
The country’s digital infrastructure has supported this transition, with Ireland often being exactly on trend with global growth, says Devey. “However, Ireland has a strong consumer base and a high level of disposable income, making it attractive to retailers. This has been especially born out in recent times where we have seen Ireland buck the general trend of underperformance in the global luxury market.”
Retail developments in Ireland have certainly been in line with the wider global trends seen in omnichannel offerings from retailers, says Frisby. “Irish consumers value home-grown brands. Kantar’s Brand Footprint report shows that four out of the top five most chosen brands in Ireland are Irish brands, with the average Irish household buying a portfolio of 77 fast-moving consumer goods brands in a year – well above the global average of 66. This shows clearly how brands are still an important choice for Irish consumers.”
Going strong
There are retail areas that are thriving at the moment in the Irish market, says Devey. “The grocery sector has remained strong, with supermarkets and local food retailers experiencing steady demand due to the essential nature of their offerings and the broadening of ranges, including private label, designed to help Irish consumers balance affordability with quality and availability.”
Not so strong
Home products specialists have shown flat growth, and some subcategories have shown contraction in spending such as appliances and electronics specialists, says Frisby. “Recent price data from the Central Statistics Office suggests that the two areas showing the greatest price declines are in clothing and footwear [-4.9 per cent year on year to July 2024] and household furnishings [-1 per cent year on year to July 2024].”
Devey says some sectors that are experiencing greater challenges are fashion and apparel. “They have faced a range of challenges, with changing consumer habits, especially in relation to sustainability and conscious consumption, and the rise of online shopping affecting physical stores.
“Department stores and traditional shopping centres may need to reinvent their strategies to attract customers back and compete with online alternatives.”
Future trends
A key trend is the focus on sustainability across retail channels as Irish consumers have become increasingly environmentally conscious in recent years, says Frisby. “Consumers are holding retailers responsible for their corporate environment responsibility, with this becoming a determining factor when choosing where to shop. A good example is the deposit return scheme, introduced in Ireland in February 2024 – when consumers purchase a drink in a container with the Re-turn logo, a small deposit is charged which can then be redeemed when the consumer returns the empty container.”
Frisby says Ireland is in line with many other geographies in the rising popularity of resale platforms in the apparel and footwear industry – again, consumers becoming more environmentally conscious.
Exciting developments
The growing trend towards sustainability in retail, with consumers increasingly supporting brands that prioritise eco-friendly practices and products, is one of the new and exciting developments in retail, says Devey.
“The affordability challenge for consumers continues to drive Irish retailers to find ways to balance cost and quality. Retailers are increasingly leveraging loyalty schemes to reward customers with discounts and coupons. In addition, retailers are expanding their private label ranges to offer a wider range of value-for-money products.”
Various expansion strategies are taking place across retail in Ireland, from an increase in outlets, omnichannel developments, the opening of new distribution centres and even rethinking strategies around store formats, says Frisby. “Investments into omnichannel developments will also continue, as retailers aim to create the perfect balance between their online and in-store sales.”
Future of retail
Technological innovations such as augmented reality (AR) shopping experiences, personalised online services, and advanced logistics solutions are becoming more prevalent, says Devey.
Interactive shopping is making its way from concept to shop floors this year and next, agrees Frisby. “In department stores or the fashion sector, touchscreen terminals in shops will enable customers to virtually try on clothes, make-up and customise product orders. In pharmacies, AI-driven virtual consultations, either on-site or via mobile apps, can complement the pharmacist’s role, especially for customers with limited mobility or living in rural areas of Ireland.”