By Steve Manners, UK Managing Director for Licensing International

The UK retail landscape is transforming to meet the evolving needs of consumers. From immersive experiences to enhanced personalization through artificial intelligence (AI), retailers are embracing new opportunities to connect with consumers—often in partnership with beloved brands.

Our retail sector is dominated by established supermarket giants like Tesco and Sainsbury’s. Sainsbury’s recently reported a 7.2% increase in annual profit, reaching £1.036 billion for the fiscal year ending March 1st, 2025. However, the company anticipates flat profits for the upcoming year due to intensified market competition and rising operational costs.

Other high street retailers, meanwhile, are making their mark by embracing innovative strategies. For instance, the 230-year-old stalwart WH Smith is focusing on expanding its travel location business—which now constitutes 75% of its revenues—while selling 500 high street stores to the new TG Jones brand under Modella Capital.

Other retailers are transforming physical stores into experiential spaces to attract customers. Pop-up stores, interactive displays, and themed retail spaces are becoming prevalent, offering unique experiences that go beyond traditional shopping. For example, Primark’s Grinch Café combined themed beverages with holiday promotions, enhancing in-store engagement.

Social commerce is also on the rise, with platforms like TikTok and Instagram enabling direct purchases through shoppable posts and live shopping events. This trend is particularly popular among younger consumers who value convenience and engaging shopping experiences.

All of these strategies support retailers’ efforts to respond to changing consumer behaviour, allowing the industry to meet consumers where they are.

Amid rising living costs, UK consumers are prioritizing value in their purchases. In fact, approximately 50% of shoppers in the region have reduced non-essential spending since early 2024. There’s also an increased preference for own-brand and value items, with 38% of consumers buying more own-brand products and 37% seeking promotional or discounted items.

Consumers are also turning to pre-owned goods, with 18% purchasing more second-hand items—a trend that is particularly strong among younger demographics that connect these purchases to their personal style and sense of self (and share their second-hand finds, often dubbed “hauls,” across social media platforms).

However, there is also a growing interest in premium products. Some consumers are focused on purchasing fewer, higher-quality products that, when taken care of, can last for years or even a lifetime. Retailers like Next are launching efforts like Seasons—an eCommerce platform that features a curated selection of fashion brands, including Tory Burch and Paul Smith—to cater to this demand.

Additionally, key retailers across the UK are expanding their focus on brands. This includes the likes of Argos, Boots, Forbidden Planet, Primark, and Smyths Toys, all of which are supporting licensed properties ranging from established brands (including Star Wars, Marvel, Harry Potter, Pokémon, and Paw Patrol) to emerging anime brands to recent growing opportunities such as Bluey, Sonic the Hedgehog, and the resurgent Paddington.

To support retailers in their growing efforts to partner with brand owners, Licensing for Retail Day returned to London on April 3rd, welcoming delegates from the licensing world to showcase the potential of brand extension to retailers looking to take their licensing programs to the next level. Executives were in attendance from the likes of Asda, Boots, DFS, HMV, John Lewis, lululemon, Marks & Spencer, Matalan, New Look, Primark, Sainsbury’s, Tesco, The Entertainer, The Works, and many more.

Moving forward, several trends will influence retail strategies and the ways retailers partner with brands:

Sustainability as a Core Strategy
Retailers will continue to prioritize eco-friendly practices, including circular economy models like product rental services and resale platforms.

Enhanced Personalization through AI
The use of AI to deliver tailored product suggestions and streamline shopping experiences will become more widespread.

Expansion of Omnichannel Retailing
Seamless integration of online, offline, and mobile shopping channels will be essential to meet consumer demands for flexibility and convenience.

Growth of Social Commerce
Retailers will increasingly utilise social media platforms to engage consumers and facilitate direct purchases, capitalizing on the popularity of social commerce.

Experiential Retail Spaces
Physical stores will evolve into destinations offering immersive experiences, fostering deeper connections between brands and consumers.

As retailers in the UK continue to innovate and create deeper engagement with consumers, opportunities for brand owners and their licensing partners will only expand.