Retail 2025: challenges and future prospects

The past few years have presented the retail sector with immense challenges: Pandemic, global supply chain disruptions, rising costs and changing consumer demands. Private consumption in Germany remains weak, which is putting additional pressure on the industry. The year 2024 in particular was characterised by sluggish business, with even Christmas sales failing to bring the hoped-for turnaround.

The current situation:

• High level of uncertainty among the population about the current situation

• High cost burden: energy, labour and material costs remain at a high level, which is unlikely to ease in 2025.

• Skilled labour shortage: According to the German Economic Institute (IW), the retail sector will lack around 37,000 skilled workers by 2027. According to the German Retail Association (HDE), there are already around 120,000 unfilled vacancies today.

• Demographic change: The ageing of society is exacerbating the shortage of skilled labour and posing long-term challenges for the industry.

Solutions and opportunities:

• Increase the attractiveness of vocational training: Greater promotion of dual vocational training and the rapid integration of refugees into the labour market could provide a remedy.

• Utilise technological innovations: Cashierless shops, self-checkout systems, automated warehouses and self-driving delivery vehicles offer solutions to compensate for a lack of labour.

• Digitalisation and customer focus: The introduction of new technologies must go hand in hand with a focus on changing consumer expectations to ensure long-term customer loyalty.

The situation in the retail sector remains tense, but the industry has the opportunity to set the course for a sustainable future through technological innovation and structural reforms. Close co-operation between politics, business and society will be key to successfully shaping change.