Retail Gazette speaks with industry experts to find out their predictions of which retailers will be the winners and losers of 2025.

Nick Bubb

Retailing analyst 

Winner: M&S

M&S has been one of the winners of 2024, but it is well placed to build on its recent success in 2025, thanks to its significant investment in creating impressive food halls and the development of a ‘weekly shop’ food range, as well as its stronger multi-channel positioning in clothing.

Loser: B&M

B&M has been one of the losers of 2024, but it looks like it will continue to underperform in 2025, given its inability to match the powerful loyalty card discounts of its supermarket rivals in food and its failure to develop a credible presence in non-food online.

Patrick O’Brien

Research director, Globaldata Retail

Winner: John Lewis

It might seem like it’s in reverse ferret mode since Sharon White left, but John Lewis goes into 2025 on the front foot. The return of its Never Knowingly Undersold promise and the de-emphasis of its cannibalistic Anyday range is re-establishing the department store as a place for quality products at the right price.

Loser: H&M

While value clothing players scramble to fend off the threat of Shein, H&M is reacting with almost Gap-like slouchiness. Primark is more fashionable, Uniqlo does basics better, Shein is cheaper. H&M needs to find a compelling reason for people to shop there.

Susannah Streeter

Head of money and markets, Hargreaves Lansdown

Winner: Marks and Spencer

Marks and Spencer has been making remarkable progress with its ranges, which have tickled the fancy of shoppers, leading to some impressive revenue growth. Its core customers have been more insulated from cost-of-living headwinds, but they’ll still have an eye on trimming costs. Clothing and home has made some impressive strides and sales growth reflects improved customer perceptions of value, quality, and style. What is particularly impressive is that over 80% of M&S’s clothing has sold at full price – which is much higher than most of its rivals. Profitability dipped slightly in the first half – due to investment in digital platforms but this is positioning the company more resilient for future growth.

Loser: Boohoo 

Key customer metrics and profits have been trending in the wrong direction at Boohoo and although there is a plan in place aimed at turning things around, big challenges lie ahead in 2025. The situation has prompted major shareholder Mike’s Ashley’s Frasers Group to try and gain two board seats at the company. Boohoo’s board has already rebuffed attempts to install Mike Ashley as CEO. They are instead counting on Dan Finley, with his successful track record at Boohoo’s Debenhams online business, to turn the company’s fortunes around.

Kate Calvert

Head of retail and consumer research, Investec

Winner: Watches of Switzerland

After a more difficult 2024, Watches is well positioned to take advantage of a market recovery in 2025. Brands are back launching more appealing mid-priced range and watches has a number of exciting new projects opening, including the long awaited Rolex flagship on Bond Street. In addition, we expect strong growth to come through in pre-owned and luxury jewellery.

Loser: Boohoo

Boohoo’s underperformance has caught the attention of Frasers Group. We expect 2025 to be another challenging year for the group and are concerned about the general health of a number of Boohoo’s brands given the inroads Shein and others are making into its territory. Turnaround stories are rarely straightforward, take time and are not without risk.

Catherine Shuttleworth

Savvy Marketing CEO

Winner: Primark

Under the smart leadership of Paul Marchant the Primark business continues to grow internationally through a strong strategy and comprehensive roll out programme. In the UK their growth continues with customer appetite for their offer resilient. In high streets across the UK where other retailers have long deserted shoppers Primark continues to surprise and delight.

Loser: Boohoo

Internal wrangling and debt repayments aside, the group is struggling to connect its brands with shoppers. As the original shoppers grow up they aren’t being replaced by the next generation of shoppers and they seem to have lost their ability to connect with them.

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The chain’s value offer and rapidly expanding store network in recent years saw it overtake Morrisons to become the UK’s fourth largest supermarket in 2022.

According to GlobalData, the German discounter could also knock Asda off its spot as the nation’s third biggest supermarket in as early as 2028, as Asda’s hold on the market has steadily fallen over the last year.

Retail Gazette examines how likely this is to happen by comparing the strengths and weaknesses of the rival grocers.

Where do Asda and Aldi currently stand?

Aldi’s record £536.7m pre-tax profit in the year to December 2023 is a big leap from the £152.6m it reported the previous year.

The discounter attributed its steep growth to its 16% surge in sales to £17.9bn and improved efficiencies across its stores and central operations.

Its results are a stark contrast to Asda, which reported a return to profit earlier this year of £180m in the year to end of December 2023, up from a £432m loss in 2022.

That said, sales for the UK’s third largest grocer were still £4bn higher than Aldi’s at £21.9bn for the year, rising 7.1% year on year.

Around 18% of Asda’s sales came from its ecommerce operations, which include online delivery, collection, and delivery via Just Eat, Deliveroo and Uber Eats.

This is in stark contrast to Aldi which revealed last month that it was closing down its click-and-collect service after four years.

However, this is not hampering the discounter. According to Kantar’s, Asda’s hold on the market has plunged dropping 1.2 percentage points to 12.6% over the past year while Aldi’s has edged down 0.2 percentage point to 9.9%.

Stores

Aldi is racing ahead with its store expansion plans, revealing this week it was ploughing £800m into accelerating its quest to reach 1,500 stores nationwide.

The discounter has more than 1,020 stores across the UK, and plans to open an average of one new store a week between now and Christmas, with the discounter having recently been in talks with the government over planning reform to speed up openings. 

Asda has 1,200 stores, most recently opening its Hale Barns store near Altrincham, and has unveiled plans for a mixed-use redevelopment of its of its ten-acre Park Royal store in May.

However, in April it was reported that it was among the supermarkets resorting to selling shops to bring down its significant debts. 

While Aldi is focused on growing its network, it emerged last month that Asda is cutting back on opening new convenience stores to focus its funds on addressing issues in its existing store network instead.

The supermarket, which opened its first Asda Express shop in 2022, previously revealed it was targeting 300 convenience stores by the end of 2026. However, as of last month, it has only opened nine.

Asda said its original target to open 30 Express stores this year had been scaled back to just 12, but that it was still planning to open 300 stores “in the medium term”.

The grocer also completed the conversion of 478 c-stores bought from the Co-op and EG UK to Asda Express during its second quarter this year.

While Asda is pushing into convenience, Aldi is remaining steadfast with its standard store format.

It has only deviated from its core store format a couple of times over the last five years, opening its first “local” store in 2019 in Balham designed to meet the increasing demand of shoppers in London. 

The format, which was expanded to 10 stores, stocks approximately 1,500 items compared to the 1,800 usually sold in standard Aldi stores.

However, a spokeswoman for the discounter noted at the time that this was “not a move into convenience retailing”. 

Aldi also runs a Shop & Go checkout free store in Greenwich, marking another format experiment.

The store offers customers a checkout-free shopping experience, where they can use the Shop & Go app or contactless payment to shop without scanning any products in-store.

However, in January the supermarket introduced a contactless payment option to the stores, raising a question mark over the popularity of the format.

In a similar vein, Amazon ditched its first UK ‘Just Walk Out’ store in 2023, which opened just over two years before, suggesting the format may not be popular among shoppers.

Which grocer offers better value?

Aldi was the cheapest supermarket for August 2024, according to Which?, coming in at £110.58 on average for its shopping list of 62 popular groceries, continuing its long-running streak as the UK’s most affordable grocer.

It has taken the title every month so far this year.

Which? said Asda was the third cheapest, behind Lidl, charging £121.85 for the same products, having come in third place every month so far this year apart from June.

Aldi has invested almost £100m in over 300 price cuts over the past three months. In April, it also vowed to beat the £380m it invested in price cuts last year, having already ploughed over £125m into reducing prices on around 500 products since the start of 2024.

As well as offering low prices, Aldi also recently launched a back-to-school fund to support families with the expensive period of buying children clothing and stationery for the new school year in another testament to its value offering.

Meanwhile, Asda invested £70m in slashing the price of essentials in May. In January, it became the first supermarket to price match both Aldi and Lidl, and slashed prices on more than 200 branded and own-label products in October.

Asda presented a renewed trading plan last month for the rest of its second half, revealing it would have a key focus on driving further use of its Asda Rewards loyalty app, which is already used in 52% of its transactions.

Some of the benefits offered by the scheme include shoppers earning 10% back after purchasing certain products, earning Asda Pounds for completing shopping tasks, and being able to convert the Cashpot balance into vouchers.

The loyalty scheme now has more than six million regular users, with participation rising on a quarterly basis. In April, the retailer claimed its focus on loyalty and prices had delivered growth for the supermarket throughout last year, highlighting the scheme as a “key revenue driver”.

Aldi is the only major UK supermarket without a loyalty scheme, with its managing director of buying Julie Ashfield telling The Mirror it instead wanted to “focus on supplying consistent great value to all customers” rather than rewarding some customers in 2022.

However, Aldi’s pricing is seen as a benchmark across the industry, with various supermarkets touting Aldi Price Match campaigns.

Tesco was the first supermarket to launch an Aldi Price Match campaign in early 2020, with Sainsbury’s following suit in 2021 and Morrisons launching the scheme in February.

Where are they investing?

Following Asda’s disappointing second quarter results in August, it set out three key areas to focus on to improve performance as it aims to deliver an “enhanced and more consistent in-store experience” for shoppers for the rest of the year.

In terms of customer satisfaction, Asda is investing an extra £30m into staff hours to strengthen its customer proposition, in hopes to improve replenishment of stock during opening hours, increase its number of workers on checkouts over weekends, and provide a more effective cleaning programme in stores.

The grocery giant is also ploughing cash into improving product availability across all categories, including its 1,000 core grocery lines most important to customers.

Thirdly, Asda vowed to deliver a renewed trading plan, focused on driving increased use of Asda Rewards.

Similarly, in May Asda unveiled a £50m store upgrade programme for its larger sites, expected to complete by the end of November.

The grocer said the move would see 50 of its larger stores “receive major upgrades”, including the introduction of new in-store services and features. Meanwhile, its remaining stores received “refreshed exterior and interior decoration” to reflect its new brand identity launch. 

However, the moves come as the supermarket continues to grapple with debts, following its acquisition by the Issa brothers and TDR Capital in 2021, which has stunted its ability to make large investments.

Aldi on the other hand unveiled it was investing an “unprecedented” £800m into its UK expansion.

The grocer is set to spend £1.4bn over the next two years in efforts to lower prices and open stores, while creating thousands of jobs and more opportunities for British suppliers.

It also said in June that it was investing £90m into its store upgrade programme, with UK managing director of national real estate Jonathan Neale explaining at the time: “We’re committed to making sure that the shopping experience is on a par with the high-quality products and service we offer.”

Over 30 of the discounter’s stores underwent refurbishments over the summer, while is said more than 100 were set to receive upgrades later in the year.

Asda vs Aldi: Who will win?

As more and more thrift shoppers seek out the discounters, does Aldi really have what it takes to surpass Asda as the UK’s third largest supermarket?

Aldi certainly seems to have the upper hand in terms of value, and stands firm in its strategies of avoiding loyalty schemes and ecommerce. The discounter is also beating Asda in terms of profits, with its record £536.7m for the year to December 2023, which seemingly is fueling more investment into its expansion.

The discounter’s UK and Ireland boss Giles Hurley said this week: “For every £1 of profit generated last year, we’re investing £2 this year – opening more stores and building the supply infrastructure to bring high-quality, affordable groceries to millions more families the length and breadth of Britain. ”

However, Asda still pulls in higher sales than its rival, and is determined to turn things around under its investment strategy.

GlobalData senior analyst Eleanor Simpson-Gould warns Asda will need to “redefine itself with a clear differentiation from discounters” if it wants to maintain its position as the third biggest grocer.

She argues: “To offset the threat to its third-place ranking, Asda will need to add intangible value to an intensified focus on price.” 

“Unless Asda can drive stronger sales through improved store experiences, an intensified focus on price and improving locality to consumers, it is increasingly likely to be overtaken by Aldi in the next five years,” she adds.

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Overall footfall was down 7.6% compared to last year, while high street footfall slumped 9.6%, according to data from MRI Software.

Shopper numbers across retail parks slipped 6.1%, and was down 5.1% across shopping centres by 8pm compared to 26 December 2023.

The fall comes as some retailers such as M&S and Next chose to keep their stores closed during the bank holiday this year.

John Lewis also shut its standalone stores on Boxing Day, with only its Trafford and Stratford shopping centre shops remaining open.

Coastal towns experienced the biggest decline, with footfall slumping 20%. Meanwhile, it dipped 7.6% across central London and 2.2% in market towns.

MRI Software analyst Jenni Matthews said: “The growing presence of online shopping continues to reshape spending habits.

“Many retailers kicked off their Boxing Day sales online [on Christmas Day], providing shoppers with the opportunity to grab early bargains from the comfort of their own home.”

She added: “This is further supported by MRI Software’s consumer pulse report, which identified that 53% of shoppers planned to complete at least half of their Christmas shopping online; a trend which may well continue into the period between Christmas and [the] new year.”

The software company analyst noted footfall was forecast to increase again on 27 December as more stores reopened.

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The luxury department store said it had put caps on orders of its Christmas hampers because of high demand, The Telegraph reported.

The retailer, which launched a pop-up in Heathrow Terminal 4 earlier this month, has been the subject of complaints across X – formerly Twitter – with some shoppers claiming they had been placed on hold for over three hours after calling the store’s customer service line.

The hampers contain a selection of luxury goods such as caviar, truffle oil, English sparkling wine, chocolates and preserves, and a selection of teas.

A spokesman for the Fortnum & Mason told the publication: “Unfortunately, a combination of high demand coupled with some staffing issues at our new distribution centre has meant some of our customers have experienced delays to their orders.

“As a result, our customer services teams are receiving an increased volume of contacts this Christmas, which has resulted in delays to response times in some instances.”

They added: “To help solve this, we’ve been limiting the number of orders that we accept, to focus on fulfilling the orders that have already been placed.

“We are truly sorry for the delays and our customer service colleagues are doing everything in their power to resolve all outstanding queries as quickly as possible.”

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The period marked a second consecutive month of faster price rises, according to the supermarket’s tracker, despite households being better off than last year.

The Consumer Price Index (CPI) rose to 2.6% in November, up from 1.7% in September and 2.3% in October, driven by higher clothing and footwear prices and the transport sector.

CEBR, who produce the income tracker on behalf of the grocer, forecast that inflation was set to remain above the 2.0% target in the coming months, with energy prices and wage growth responsible for driving further higher essential costs.

Despite inflationary pressures, household spending power is continuing to improve year-on-year.

Cebr managing economist and forecasting lead Sam Miley said: “The Income Tracker saw a slowdown in growth in November, driven by accelerating inflation. That said, spending power has continued to increase, with the Tracker having exhibited double-digit growth for sixth consecutive months.

“Spending power amongst households has seen a gradual improvement throughout the year, which is welcomed ahead of the festive period. Nevertheless, consumer expenditure over Christmas is still expected to be held back relative to pre-pandemic levels amidst elevated inflation and the lingering effects of the cost-of-living crisis.”

The figures come after Asda recently brought back its 15p festive veg sale as it geared up for the big day.

From 19 December until 24 December, shoppers at Asda will be able to purchase 1kg carrots (currently 69p), 500g sprouts (currently 85p), 360g broccoli (currently 79p) and 500g parsnips (currently 75p) for 15p each instore and online.

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Shops in Arbroath, Baillieston and Kirkintilloch are set to open next year, while refurbishments are planned for its Carluke, Glenrothes and Stirling stores.

The German discounter said the investment supports its growth ambitions north of the border and enables it to keep up with growing consumer demand.

In 2025, Aldi will also launch a recruitment drive for over 100 new logistics team members to work at its Bathgate Regional Distribution Centre.

Earlier this month, the supermarket unveiled plans to invest around £650m across its UK store network next year

The latest investment comes as the supermarket celebrated 30 years in Scotland in 2024, welcoming 58m customers through its doors in Scotland over the year.

As well as its new stores, Aldi has committed to extending or refurbishing six of its existing stores over the next two years, with an extension planned for Galashiels, refurbishments planned for Linlithgow, Glenrothes and Stirling and further upgrades in Hamilton and Carluke.

Regional managing director for Aldi Scotland Sandy Mitchell said: “As we look ahead to 2025, we remain committed to reaching more customers than ever before, with the opening of more stores and increased investment in Scotland.

“This move is a testament to our belief in Scotland’s vibrant economy and the exceptional quality of its suppliers. We remain committed to championing Scotland, creating local jobs, and strengthening our relationships with local partners as we continue to expand and enhance our offering.”

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The fashion retailer is seeking shareholder approval for the proposal in a general meeting scheduled for 8 January 2025.

A 75% majority of votes cast will be required for the resolution to pass. If approved, the delisting is expected to take effect on 23 January 2025.

Founder Tarak Ramzan and his family, along with major investors Tajveer and Amraj Gill, are all set to vote in favour of the move.

The retailer said delisting will ‘be in the best interests of the company and its shareholders’.

It comes as Quiz launched a strategic review earlier this month, after warning that it could run out of cash in the new year amid its poor trading performance.

Back in June the business said it was “severely impacted” by the cost-of-living crisis.

While last month, it experienced “a marked decline in traffic both online and in-store”, which resulted in sales for the four months to 30 November to drop 5.7% to £24.9m.

Quiz noted that the “disappointing level” of sales during November meant the cash headroom available to the business is less than previously anticipated. It currently has £1.2m in total liquidity headroom.

As a result, it cautioned that subject to the trading performance during the important pre-and-post-Christmas period, the group’s existing bank facilities could be fully utilised in the first quarter of 2025.

At the time, Quiz said: ”Given the decline in the revenues during the key trading month of November and the requirement to improve the liquidity of the business the board is reviewing the group’s financing and strategic options and has engaged advisors to consider appropriate options. A further update to shareholders will be provided as and when appropriate.”

Back in October, the retailer’s chief financial officer Gerry Sweeney announced he was set to leave the business after more than eight years.

His departure comes amid a turbulent time for Quiz as it looks to reverse its falling sales and profits, though he will remain with the group until 31 March next year to support a smooth transition to his successor.

In the year to 31 March 2024, the business plunged to a near £7m pre-tax loss –  down from the £2.3m profit it recorded in 2023.

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Some of Britain’s largest retailers such as Morrisons, Sainsbury’s and B&Q have agreed to restore the Retail Jobs Alliance (RJA), which was initially launched in 2022, Sky News reported.

Insiders said that the RJA is expected to engage with the Treasury over the coming weeks to argue that a host of tax rises and regulatory changes will put investment by major retailers in economically deprived parts of the country at risk.

The coalition aims to produce analysis revealing that many of the shops with so-called rateable values over a new £500,000 threshold are based in areas relying on retailers for employment opportunities.

The group is expected to roll out in January and is likely to include other retailers, sources have said. The RJA is said to be coordinating its plans with the British Retail Consortium.

The move follows a wave of backlash over Labour’s first fiscal Budget in October, with more than 70 retailers writing to Reeves cautioning that the “sheer scale” of the new costs on companies meant job cuts were “inevitable”.

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The site has posted an alert at the top of B&M’s page after it found evidence that someone had been trying to aggressively boost the employer ranking for the discount store chain, The Times reported.

Glassdoor said that alerts of this kind are only posted when it finds “particularly aggressive” attempts by employers or others to influence or manipulate the integrity of reviews.

The website reads: “We do this so our users will know that the employer tried to undermine our ratings system.”

A B&M spokeswoman told the publication that the retailer, which has a Glassdoor rating of 3.1 out of 5, “has a zero-tolerance approach to artificial review rankings”.

She added: “The banner appeared some years ago and we have implemented new policies and procedures to prevent such practices. We look forward to working with Glassdoor to have the banner removed.”

B&M was booted from the UK’s FTSE 100 earlier this month in the latest reshuffle of the London Stock Exchange after its shares had plunged 21% during the past three months.

The retailer reported its adjusted operating profit fall 1.8% to £258m in the six months to 28 September as it faced higher costs following an increase in stores and investment in its supply chain in France.

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ONS senior statistician Hannah Finselbach said: “Retail sales increased slightly in November following last month’s fall.

“For the first time in three months there was a boost for food store sales, particularly supermarkets. It was also a good month for household goods retailers, most notably furniture shops.

“Clothing store sales dipped sharply once again, as retailers reported tough trading conditions.

“With November’s retail sales survey covering the four weeks to the 23 November, Black Friday itself will fall within December’s figures. However, our figures account for this shift in timing to give us the best picture of what is happening in the shops.”

The government department noted Black Friday fell on 29 November this year, putting it outside of its November reporting period. It ensured its seasonally adjusted estimates accounted for the shift in timing.

PwC leader of industry for consumer markets Lisa Hooker added: “There was a small headline rise in November’s retail sales, up 0.2% in value terms compared with this time last year, and seemingly reversing the weaker trend from the previous couple of months.

“However, given the exclusion of Black Friday from these results, they should not be taken as an indicator of wider retail performance in the run-up to Christmas.”

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