Global retailers are taking a more cautious approach in their growth strategies amidst escalating economic and geopolitical pressures, according to a new study by the World Retail Congress (WRC), Incisiv, and Manhattan Associates.
The study, released at this year’s edition of WRC which kicked off yesterday in Berlin, Germany and will continue until April 29, reveals that fewer than one in six industry leaders are currently pursuing aggressive expansion. The majority are now focusing on cost control, operational efficiency, and selective growth.
“The certainty has disappeared,” the report states, reflecting a major shift in priorities as the factors behind the current market volatility are becoming permanent disruptors rather than temporary. Among the executives surveyed, only 52% reported engaging in selective expansion, while 35% described themselves as in “fully defensive mode.” External pressures such as geopolitical instability and trade disruptions were cited by over three-quarters of respondents as key elements in shaping their strategy, with 72% mentioning that inflation and margin pressure were creating structural constraints.
In a statement, Ian McGarrigle, WRC President, remarked: “The retail operating environment has fundamentally changed. Geopolitical instability and inflationary pressures are now the norm, cutting through the daily reality of businesses across all markets. Retailers must rethink their approach to growth, investments, and responsiveness.”
Investments are still on the agenda, but companies are more targeted, with a focus on customer experience and personalization (72%), AI and advanced technologies (58%), and supply chain capabilities (56%). However, seven out of ten leaders admit they cannot transition from decision to execution as quickly as their competitors due to persistent implementation lag.
Regarding AI, executives expressed both concerns and opportunities. A significant 98% worry that AI-driven research may diminish brand visibility. Despite a high confidence in the technology, actual AI implementation remains limited. While 91% of leaders expect AI to be a requirement by 2030, only 29% have the necessary databases and technology.
The report identifies this gap as one of the most significant risks, highlighting the importance of operational infrastructure in leveraging AI insights. Meanwhile, in physical retail, stores are seen as essential for customer relationships, with 81% considering them the “cornerstone” of commerce in 2030. Stores are evolving into hubs for order management, digital engagement, and brand experience.
Katie Foote, Senior Vice President and Chief Marketing Officer of Manhattan Associates, emphasized the importance of unifying commerce to meet customer expectations and drive profitable growth amidst current economic trends and global uncertainty.
This article was translated using artificial intelligence and edited by a FashionUnited journalist.
