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Deloitte: Retail executives identify the biggest challenges of 2025

Retailers see challenges and growth opportunities in 2025.

More than eight-in-10 U.S. retail executives agree that one specific issue will pose a challenge in the coming year.

Eighty-one percent of U.S. retail executives surveyed by Deloitte said increasing business costs due to climate change (81%) are among the biggest hurdles they will face in 2025. Other leading challenges as ranked by respondents include:

  • Increasing price wars (80%)
  • Rising cases of retail theft (76%)
  • Strained consumer trust due to next-gen tech (69%)

[READ MORE: Survey: With recession fears, consumers focused on price in 2025]

The Deloitte “2025 U.S. Retail Industry Outlook” also revealed respondent expectations for how consumers will act in 2025, including:

  • Prefer spending on experiences over goods (80%)
  • Increase the use generative AI for shopping (71%)
  • Purchase products increasingly on social media (68%)
  • Go on frequent shopping trips with smaller basket sizes (67%)
  • Value lower prices over brand loyalty (56%)

To achieve growth, respondents are looking to:

  • Strengthen loyalty programs (46%)
  • Strengthen digital commerce offerings (45%)
  • Enhance omnichannel experiences (44%)

Retail executives surveyed are focusing investments around:

  • AI forecasting: Demand planning, inventory management, and delivery and supply routes.
  • Warehouse automation: Removing human touchpoints through robotic systems.
  • Real-time inventory visibility: Tracking systems to monitor shipments and inventory throughout channels.
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Other findings

  • Eight-in-10 respondents anticipate increased social commerce in 2025.
  • Three-quarters of respondents say they’re increasing investments in retail theft prevention.
  • Three-quarters of respondents expect AI to assist with dynamic pricing based on demand, competition, and other factors.
  • Seven-in-10 surveyed executives say retailers will expand their in-house delivery capabilities in 2025. In addition, 64% of these executives believe that the number of automated micro-fulfillment centers will grow significantly in the next five years to support the expansion of these delivery services.
  • Two-thirds of respondents plan to allocate moderate-to-major investments toward workforce hiring, retention, and future-readiness in 2025.
  • More than half (53%) of respondents said they plan to make moderate-to-major investments in mergers and acquisitions in 2025 (up significantly from 30% in 2024).
  • Nearly half of respondents said convenience is key to enticing consumers, especially around last-mile delivery options and inventory visibility. Surveyed executives also see generative AI creating efficiencies for the consumer through product recommendations and price comparisons. Seven-in-10 respondents expect retailers to use such tools increasingly in the year ahead.
  • Nearly half of respondents plan to make moderate-to-significant investments in physical store remodels or new locations in 2025.
  • Four-in-10 respondents plan to engage customers through improved shopping experiences.
  • Three-in-10 respondents plan to make significant technology investments to modernize their supply chain, such as unifying merchandising, supply chain, and store operations.

The report is based on a survey of 75 U.S. retail industry executives, of which 80% were from companies with annual revenue of $10 billion or more, interviews with industry experts, and a financial analysis.

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