However, Specsavers believes it has found a model that can scale. The optical retailer has expanded its recycling scheme to all UK stores, adding around 300 locations to an initiative first introduced in 2022.

The move means customers can now drop off unwanted glasses, cases, cleaning cloths, contact lenses and contact lens packaging at every Specsavers branch, regardless of where the products were originally purchased.

In 2025, the scheme collected and recycled 72 tonnes of material from 659 stores and laboratories, almost five tonnes more than the previous year.

For Specsavers’ head of sustainability for the UK and Ireland Helen Curran, the scheme grew out of a gap in the market rather than a regulatory requirement.

“Products like glasses and contact lenses do not really fit into standard recycling schemes,” she said. While donation schemes for reusable spectacles have existed for years, there was no straightforward route for glasses, cases, cloths, contact lenses and blister packs to be handled together.

“We saw an opportunity to make it easier for customers and operationally easier for ourselves.”

Turning optical waste into raw materials

One question facing many retailer recycling schemes is what actually happens to the waste once it disappears into a collection box.

Specsavers’ programme is run with recycling specialist MYGroup, which separates and processes the material at its UK operation in Hull. According to Curran, the scheme captures a broad mix of products, from old spectacles and cases to contact lens packaging and worn lenses.

The retailer operates two collection streams: customer-facing recycling boxes in stores and separate collection points within its laboratories. The lab stream is designed to capture higher-value materials such as dummy lenses used in the manufacturing process.

Specsavers does not currently separate its reporting between customer returns and internally generated waste, nor does it break down the 72 tonnes by material type. Likewise, the company was unable to provide a figure for what proportion of its total UK waste footprint the scheme represents.

What it can say is that much of this material would previously have entered general waste streams.

“If a company was using a different partner that only took glasses and reused them in a developing country, you would only really use around 20 to 30 per cent of those frames,” Curran said. Cases, cloths, contact lenses and blister packs would typically have been discarded through conventional waste routes.

The collected material is ground down and repurposed into products including joinery boards and furniture. While the recycled content is not currently being incorporated back into Specsavers products, the company has worked with MYGroup to produce Specsavers-branded pens made from material recovered through the scheme.

“It is important for people to be able to say, ‘Wait, waste made this?'” Curran said.

The commercial case for sustainability

While sustainability projects are often presented as purely environmental initiatives, Curran argues that waste reduction and commercial efficiency increasingly go hand in hand.

“If we look at general waste for a commercial business, it costs more to have more general waste bins,” she said. “Recycling costs less.”

That thinking appears to be informing a wider sustainability programme across the business. Earlier this year, Specsavers won Retail Week’s Green Initiative of the Year award for changes to its ophthalmic lens manufacturing process. The project reduced hard-to-recycle plastic waste by 107 tonnes a year and cut annual carbon emissions by 230 tonnes through changes to lens production and stock management.

The retailer is also pursuing broader environmental targets. According to its sustainability commitments, Specsavers is targeting net-zero emissions across scopes 1, 2 and 3 by 2050, with interim goals to reduce operational emissions by 50% and supply-chain emissions by 25% by 2030.

Curran said the company is increasingly focused on reducing waste before it is created, particularly through packaging changes and material efficiency.

“This programme is just one area where we are looking to reduce waste overall, both by improving our recycling rates and looking at waste at source.”

The growing regulatory burden is also shaping decision-making. With measures such as digital product passports and wider sustainability reporting requirements moving up the agenda across Europe, Curran said the priority is understanding what data businesses need and ensuring suppliers are part of the process.

“Any big business will have the majority of its emissions sitting in scope three,” she said. “It is about working with suppliers.”

For Specsavers, the challenge appears less about persuading customers to participate than making participation simple. The company says customer feedback has been positive, although it has not published formal participation figures.

“I think everybody wants to do the right thing,” Curran said. “You just have to make it easy and accessible for them.”

As retailers face growing scrutiny over waste, packaging and supply-chain transparency, Specsavers shows the test lies in whether businesses can make these initiatives easy enough to become routine.

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According to Rithum’s retail director EMEA Mark Howell, the model is becoming an increasingly important part of modern retail strategy, allowing businesses to widen their assortment while saving on cash and warehouse capacity.

Retail Gazette caught up with Howell, who says the fundamental attraction of dropshipping is simple: retailers only pay for stock once it has been shipped by a supplier.

“The virtue and advantage of doing a model like dropship is you only pay for it when it’s shipped by the brand,” he explains.

For retailers faced with constraints such as warehouse capacity, store space and inventory budgets, dropshipping allows them to still provide for customers without ‘committing significant capital upfront’.

“Retailers want to solve a problem,” Howell says. “They want to be relevant for customers. They want to have choice and assortment.”

The approach has become particularly attractive as retailers seek to compete with ecommerce giants such as Amazon, where a significant proportion of products are supplied and fulfilled by third-party sellers operating from warehouses Amazon itself does not own.

“Mimicry is the highest form of flattery,” Howell says. “If it works, why aren’t I doing it?”

What does dropshipping actually change?

While dropshipping is often discussed as a commercial strategy, Howell argues the biggest shift happens operationally.

Instead of goods moving through a retailer’s own distribution network, suppliers become responsible for fulfilment and delivery. The retailer, however, remains accountable for customer experience.

“The physical movement of the goods is managed by a supplier,” he says. However, what does not change are customer expectations.

“Is it being delivered on time? Is the experience good for customers? Is it packaged well? Is it turning up in one piece? All of those things are still true.”

This, Howell says, creates one of the biggest challenges for retailers adopting the model: learning how to relinquish some control without losing visibility.

Many businesses, Howell says, still operate around wholesale processes built over decades. Buyers and merchandisers remain accustomed to approving every SKU, product description and item before it reaches customers.

One of the common mistakes is attempting to replicate those same wholesale processes within a dropship environment.

“If you try and replicate your wholesale processes just into dropship, then you will suffer. You will fail because you’ll still be slow.”

Instead, retailers need to adopt a “trial and learn” mindset, using supplier inventory to test new products and categories before making larger commitments.

The model can also help retailers free up warehouse capacity by moving slower-selling lines out of their own fulfilment networks while continuing to offer them online.

Trust and data become the new battlegrounds

Howell believes that as retailers move away from inventory-led expansion, trust becomes the defining competitive advantage.

“We shop with retailers that we get a good experience with,” he says. For that reason, supplier performance cannot be left to chance.

Retailers typically establish strict operational playbooks, service-level agreements (SLAs) and key performance indicators (KPIs) for participating suppliers. Failure to meet those standards can result in financial penalties or removal from the programme.

“If you don’t do what customers expect, you’ll erode trust,” Howell says. He points to Marks & Spencer as an example of a retailer that established clear expectations from the outset when building its programme.

Alongside trust, product data is becoming increasingly important as consumers change how they discover products online.

Howell says retailers are now navigating a world where search is becoming more conversational, driven by platforms such as ChatGPT, Gemini and other AI-powered tools.

“It’s not just enough to say it’s a laptop with 16GB of memory and a certain screen size,” he explains.

If consumers search for a lightweight laptop with a high-quality display, or a breathable hiking backpack suitable for long walks, retailers need product attributes that reflect those needs.

“If that information isn’t there, the AI engine isn’t going to find it.” The challenge is compounded by the fact that many retailers are still working to improve the quality of legacy product data already sitting across their websites.

Learning from past failures

While dropshipping and marketplace models have become commonplace in the US, Howell believes the UK market has historically struggled to achieve the same level of success.

Part of the reason, he argues, is that many retailers attempted to bolt dropship programmes onto existing wholesale systems rather than redesigning processes around the new model.

“UK retailers were trying to make these quite big ideas work, but they were still being bound to the legacy of old wholesale processes.”

By contrast, retailers that have succeeded have invested in new fulfilment models while remaining realistic about the limitations of older technology infrastructure.

“It’s about finding the best path with what you have,” Howell says. The growing maturity of the sector is also helping. More retailers have now seen successful examples in the market, while specialist technology providers and industry professionals bring greater experience than was available a decade ago.

Howell points to Next as an example of a retailer that has successfully modernised its fulfilment approach. While the retailer still has deep roots in traditional wholesale operations, it has developed new fulfilment models and moved beyond some of the limitations of legacy processes.

He also highlights Marks & Spencer’s approach, praising the retailer for having a clear vision of what it wanted its dropship programme to achieve and for setting clear expectations for suppliers from the outset.

Howell says retailers such as M&S, Adidas and Pets at Home may use different commercial models and operate in different sectors, but all face the same challenge of balancing customer experience, supplier relationships and operational efficiency as they expand their assortments beyond inventory held in their own warehouses.
At the same time, retailers are facing new pressures ranging from rising fuel costs and geopolitical disruption to changing regulation around artificial intelligence.

Howell highlights the forthcoming requirements under the EU AI Act, which will introduce new transparency obligations around AI-generated content and product information.

He also points to the future development of Digital Product Passports, which are expected to require significantly greater product-level data and traceability across supply chains.

While the final shape of those regulations is still evolving, Howell believes retailers will increasingly require suppliers to provide the necessary information as a condition of participation.

“The retailer is still heavily liable due to our laws and legislation in the UK.”

For retailers balancing growth ambitions with mounting operational complexity, the challenge is no longer simply expanding assortment. It is doing so while maintaining trust, visibility and compliance.

As customer discovery shifts towards AI-driven search and product recommendations, retailers may find that the quality of their product data matters just as much as the size of their catalogue.

The retailers that succeed will not necessarily be those holding the most stock, but those that can connect customers to the right products, at the right time, through the right fulfilment model.

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As part of the app experience, customers can browse products and receive styling advise and recommendations.

Head of Digital Product at ASOS Melissa Lim explains that the retailer decided to implement an AI stylist feature on ChatGPT because it had found that consumers were increasingly using agentic platforms as part of their shopping journey.

She says: “For us, this is about being present where customers are already discovering fashion and making sure ASOS is part of that inspiration journey, rather than sitting on the side-lines.

“The ASOS Stylist app helps us show up in that moment of inspiration, reach new potential customers and drive discovery back to ASOS.com.”

According to Lim, the ASOS Stylist app in ChatGPT is part of its strategy to reduce friction in the shopping experience. It’s part of a plan to meet consumers where they are.

She adds: “It is also a natural extension of our role as The Stylist at ASOS: helping customers discover, combine and wear fashion with confidence.

“By bringing that styling support into new platforms, we can show up earlier in the inspiration journey and make it easier for customers to turn ideas into outfits and outfits into purchases.

Lim highlights that the stylist tool recommends products that are “genuinely” right for the consumer.

She says: “At ASOS, we see our role as helping people style themselves with confidence, not steering them towards products that serve a short-term commercial objective.

“The value of this experience lies in giving customers recommendations they can trust, because building that trust over time matters far more than any immediate gain. That principle was fundamental to how we designed the stylist.”

She explains that up until now, ChatGPT has primarily been a text-focused experience. However, fashion is a visual experience and can oftentimes be an emotional purchase. Movement, draping and fabric details all come into consideration when buying clothes.

She says: “Our experience is designed to be highly visual, bringing immersive product imagery and video, including livestream content, directly into the chat.

“We’ve applied learnings from years refining the e-commerce journey on ASOS to create familiar user interface (UI) patterns so shopping in ChatGPT feels more familiar. This shows in the way ASOS Stylist presents an edit or recommends similar items as alternatives.”

She highlights that the retailer’s Stylist app enables its customers to shop more “confidently” as it offers advice and guided conversation on how to shop for a particular body shape or style.

She says: “User research and A/B test insights from our product pages also show that videos provide more nuanced information about fit, so bringing this more prominently within the chat experience allows customers to better visualise how an item might look like on them.”

Lim adds that the retailer made the decision not to allow consumers to log in to their ASOS accounts through the ChatGPT for the initial release, so consumers are referred back to ASOS.

However, if customers have chosen to preserve its chat history within ChatGPT itself, the stylist will have access to previous conversations.

Lim says: “It’s still early days, but so far we have seen promising early engagement, with traffic from the ChatGPT channel increasing since launch, especially from new users.

“Once this new audience lands on ASOS, we see them actively browsing and saving products rather than leaving without any further interaction.”

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K-Beauty has become increasingly popular with UK consumers and PURESEOUL is the biggest K-Beauty retailer in the UK.

The brand has recently grown its offering and has launched MilkTouch’s liquid foundation. The foundation is the first liquid foundation from a K-Beauty brand available in the UK.

Retail Gazette sat down with PURESEOUL’s founder Gracie Tullio and its marketing strategy & communications manager Felicity Loftus to find out about how they have marketed the product.

Most people when they think of K-Beauty foundations think of cushion foundations, popularised on TikTok by Tirtir. But MilkTouch has brought a liquid version to the UK market.

Tullio explains that MilkTouch have been their partner since 2025 and are the first partner the Korean beauty brand has within Europe. She highlights that as they work with all their brands directly, it impacts the way they run their marketing campaigns.

She says: “The entire campaign, from start to finish, we’ve done in complete collaboration with the MilkTouch team in Korea.

“I think that kind of intensive localisation, personalisation and the relationships that we have with our brands kind of form the foundation of how we even begin to brainstorm a campaign like this. It’s very much about us and HQ.”

PURESEOUL had previously worked with MilkTouch to launch its cushion foundation. The foundation proved to be extremely popular with audiences and went virial on TikTok. A video of the foundation being passed around the firm’s office has over 2 million views on the social media platform.

She says: “I think Milk Touch as a brand is a good example of a brand that has put their faith in us as a local partner. The K-Beauty market looks very different in each country, and I think we really understand what it means to be a UK K-Beauty customer.

“We know what our community wants, and as a brand, they’ve really lent into that. With their previous cushion launch, we saw the results of that in a lot of the organic social media, but equally this time around, we now have got creators asking to be involved in it, and I can only anticipate that we’ll be seeing a lot  of organic social content for this specific foundation as well.”

Loftus added that its previous work with the brand on its foundation cushion led to the brand approaching PURESEOUL about the liquid foundation. And the campaign started from that very moment.

To come up with the right product for the UK market, MilkTouch and PURESEOUL reached out to creators to invite them to a testing day.

At the testing day, they were able to pick out their favourite formulas and give feedback on what they thought of the shade range, the tones and the coverage.

Tullio says of its creator network: “These are people that speak to brands every day, they’re a pin, they have seen more of the market, than we have. As beauty creators, their opinion is really, really important to us. It’s almost like they’re massive product testing feedback gurus.”

Loftus believes that the consumer base for the foundations “bridges the gap” between the generic beauty customer who wants to try out K-Beauty and the K-Beauty consumer.

She explains: “A cushion foundation might feel a bit out of their realm as they’re not really sure on that format. But this product gives consumers everything they may want from a K-Beauty foundation, as it has that glowy, glassy, dewy skin finish, but it also feels quite accessible to all beauty consumers in the UK as well. I think it’s a nice bridge between existing K- beauty customers and new K-Beauty customers.”

According to Loftus, this is just something the brand did for the UK, despite the fact the foundation is being launched globally.

Alongside creators, the retailer has utilised its loyalty scheme, Cloud Club, social media and its newsletters.

Loftus highlights that the Cloud Club was an important channel for the retailer and that its loyalty members had access to a pre-launch sale for the foundation. Members of its loyalty club were also invited to the launch event on June 2 with MilkTouch’s ambassador Twice member Jihyo.

Tullio explains that they approached the brand about having Jihyo at the event after finding out she was going to be in London for a concert.

She says: “So we really cheekily went and said, “Okay, she’s in London, and we’re launching this foundation, maybe can she do something?

“The imagery from the campaign is very Jihyo heavy. And the whole photo shoot was done in a blue theme for PURESEOUL, which is awesome.”

The retailer borrowed a Korean marketing technique to introduce the product to consumers, offering a free foundation brush with every purchase.  The brush is inspired by the viral makeup spatula trend from last year that had people applying their base make up with a spatula rather than a brush for a smoother, more flawless finish.

After the launch, it is important to keep up the storytelling, so most of the campaign content will come after the launch event.

Tullio says: “We really encourage organic content because we always want to be accessible to our customers. And it feels quite natural and organic, because that’s how we love and experience our products as well.

“We just want K-Beauty makeup to feel accessible and educational. It’s really crucial in terms of our strategy. No one wants to be sold to. If the product’s good enough, then people will like it, and that’ll do the job for you. I think our focus is on making sure we have good products itself, and then the rest just kind of happens naturally.”

Tullio highlighted that PURESEOUL will also look into adding promotional offers and free gifts after the initial launch.

She says: “We are really anti discounting, and we’d much rather give the customer something of value to kind of sway them if they need it, rather than just a flat promotion.”

Loftus highlights that the omnichannel experience is important to them as a brand as they aren’t a “super digital company”.

She explains: “It almost feels like an immersive experience when you’re experiencing one of our launches as a customer, because it really is across all those touch points.

“Take the journey of this foundation, they might have seen some of the content from last year, and then it’s resurfaced this year.  Or maybe they saw some content of their favourite influencers attending the testing event, and then it comes to launch. Or maybe they’re on our newsletter, or they’re part of our Cloud Club, so they get those comms, and then they go into store, and they can test and shade match.”

Tullio adds: “We want our customers to feel really involved in the product story.”

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Operating since the 1880’s in Sweden and Denmark, the firm now has farmer owners in seven European countries. Its brands include Arla Cravendale, Arla Skyr and Arla Protein.

The firm has seen significant success, with a revenue of €15.1 billion (£13 billion).

Sarah Oxley, lead shopper marketing senior specialist at Arla Foods explains how the firm’s retail marketing strategy has contributed to its success.

Arla Foods’ retail marketing strategy is focused around retail activations, according to Oxley.

She says “It’s a key part of how consumers experience our brands and ultimately nudges shoppers to conversion. It’s also an important way we build relationships with our retail partners.

“What’s changing is how far that can go beyond the shopping mission. We’re testing how retailer data and media can work harder at other parts of the consumer experience, making sure it’s cost effective as part of the wider marketing mix.”

However, the firm has been adapting its strategy and using more offsite activity to drive “consideration and reach new audiences”.

She says: “The pace of innovation in-store is exciting, we now have the opportunity to connect with consumers in a much more joined-up way when they’re actually in a shopping mindset, which is ultimately where it matters most.”

She adds that retail media allows the firm to be much more targeted. One example she gives is of a campaign Arla Foods recently ran which focused on increasing purchase frequency.

Oxley says: “There are also some interesting gamification mechanics emerging from retailers which we’re testing. It’s early, but it’s a good example of how engagement is evolving beyond just traditional formats.”

“There are different levels of data maturity across the market. Where we have access to strong first-party data, we absolutely lean into it. Where that isn’t available, we flex, using things like geography, store performance or category insights, as we always have. But there’s an opportunity for more consistency and depth of data across the market, which would help unlock more value.”

Creative is becoming a much bigger factor in helping brands stand out within a retail media environment, especially as stores become more “digitised”.

She says: “We see creative as the next “event horizon” for the retail environment. For us it’s about strong, clear messaging and pushing creative where we can, but also really understanding the retailer’s strategy and how we fit into that.

“The goal when activating in store is always helping to achieve our branded ambitions and support the retailer deliver their strategy.”

She adds that its marketing strategy has the biggest impact when brand comms, retail activity and promotional activity comes together.

Oxley says: “It should feel like one connected experience, just adapted to the moment they’re in. There’s still more to do as an industry to make retailer data easier to integrate to branded activity, particularly in terms of consistency and collaboration.”

She explains that measuring success of campaigns beyond sale metric is one of the biggest challenges marketers face.

Arla Foods works closely with its marketing teams and agency teams to try and get a better view of how retail market contributes to the brands success beyond just short-term sales.

However, there needs to be more consistency and rigour in the data and reporting coming from retail media networks as that’s a key part of highlighting key investment areas, according to Oxley.

The brand had learnt that retail media can be a very “versatile lever”. It drives short term sales, but also has a role in building the brand and strengthening Arla Foods relationship with retailers.

She says: “When you get the balance right – data, strategy, creative, execution – it can create campaigns that stand out and that people and our retailers notice, which is ultimately what we’re aiming for.”

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Morrisons highlighted that the stores on the chopping block, which were acquired as part of its £190 million rescue deal for McColl’s in 2022, had been loss-making for some time.

It also noted that the stores’ performance had been “challenged for a number of years” despite efforts to boost their trading.

However, the move to axe these stores may seem like a surprising one, given that the supermarket unveiled plans to turn hundreds of corner shops throughout England into its own branded convenience stores in October.

A growing franchise model

Morrisons has roughly 1,700 Morrisons Daily stores, with a large proportion of these owned and operated by independent retailers.

In recent times, the supermarket has moved to grow a franchise model which is still expanding, according to Sky News.

In October, The Telegraph reported that Morrisons was set to launch 250 new “Morrisons Daily” convenience stores in 2026, by enabling corner shop owners to turn their stores into Morrisons franchises.

Morrisons’ expansion via its convenience franchise network makes sense. According to market research firm Mintel’s UK convenience stores market report for 2026, the UK convenience store market hit an estimated £54 billion in 2025 and is expected to increase to £61.8 billion by 2030.

The report also highlighted that grocery multiples were “investing more heavily” in smaller format stores “to capture everyday missions and food-to-go spend”. It noted that this underlined “how convenience has moved to become a more central pillar of grocery strategy”.

Likewise, a July report from estate agents Savills UK claimed that UK grocers were expanding their convenience store formats to “meet shifting consumer behaviours,” particularly “the demand for speed, proximity, and flexibility in shopping”.

Morrisons’ other convenience-related moves

Despite its franchise growth, the supermarket’s 100 convenience shops in the firing line are not its first round of company-owned c-stores to be axed of late.

In March 2025 the retailer revealed plans to axe 17 convenience stores, alongside 2 cafés, all 18 of its Market Kitchens, 13 florists, 35 meat counters, 35 fish counters, and four pharmacies as part of a major operational shake-up.

Commenting at the time, CEO Rami Baitiéh explained: “The changes we are announcing today are a necessary part of our plans to renew and reinvigorate Morrisons and enable us to focus our investment into the areas that customers really value and that can play a full part in our growth.”

More recently, Morrisons also revealed plans to restructure its convenience and general merchandise teams in March, placing around 100 roles at risk at its head office. The move effectively axed the business’s convenience buying team, according to The Grocer.

Explaining at the time, a spokesperson for the supermarket said: “To enable us to deliver a truly multichannel shopping experience for Morrisons customers, we are proposing to integrate the operation of our supermarkets and company-owned convenience stores and support office functions into a single team structure.

“The plans will allow us to leverage the existing skills and expertise we have in the business, remove duplication, simplify our store operations and capture efficiencies.”

However, they noted: “There will be no direct impact on Morrisons Daily stores.”

Additionally, Morrisons director of convenience and wholesale Matt Heslop stepped down from his role in February, after joining the business in March 2025.

What’s next for Morrisons’ c-stores?

Despite the “challenged” performance of Morrisons’ 100 company-owned c-stores, the supermarket also blamed the government for its decision to axe the sites. 

It claimed that “significant cost increases resulting from government policy choices” such as increases to the national living wage and employer National Insurance contributions had worsened the situation. 

It insisted that Labour’s budget decisions had made attempts to return the shops to profitability “even more difficult”.

So what’s next for the future of Morrisons’ convenience stores? For now, the business seems laser-focused on its franchise model.

As further incentive for its franchisees’, the company introduced “new and improved terms” for its independent retailers in July, including the chance to earn up to a six percent volume rebate, up from the previous cap of 1.5 percent.

Indeed, Morrisons’ director for wholesale convenience Paul Dobson insisted that its “new and existing franchise partners” were “pivotal” to its overall success.

“We’re excited to implement these enhanced terms for our independent retail partners and confident they will help us meet our ambitious growth plans for our Morrisons Daily estate,” he insisted.

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Despite this, the youth jobs crisis is undeniably a growing problem in the UK.

A new interim report into youth unemployment, published by former minister Alan Milburn, found that job and career opportunities for young people were “not growing” but were “shrinking”.

Additionally, the review claimed that 1 in 6 young people were set to be out of work, education or training in five years unless action was taken.

In response to the issue, the government has rolled out an “employment lifeline” for young people across the country, offering 300,000 new work experience and training placements as part of a £2.5 billion youth employment support package.

The placements come as the government accelerates its “Youth Guarantee,” designed to “give every young person the chance to earn or learn”.

The programme also aims to reverse the growing numbers of young people not in education, employment, or training (NEETs), which currently stands at just over/under one million.

However, the British Retail Consortium (BRC) has cautioned that the government’s youth jobs push risks being undermined by rising employment costs and new regulation.

A “dramatic fall” in entry-level jobs

The BRC’s comments follow a warning from Next CEO Lord Wolfson earlier this month of a “dramatic fall” in entry-level job opportunities throughout the UK due to rising employment costs and weaker hiring conditions.

Demonstrating his point, the exec told the BBC that while his retailer typically received roughly 10 applicants for every shop vacancy two years ago, the figure had now soared to 19.

Recent Office for National Statistics (ONS) figures also revealed that the jobless rate for 16 to 24 year olds had hit 16.2 per cent during the first quarter of the year, marking an 11 year high.

Likewise, retailers have cautioned that higher National Insurance contributions and hikes to the minimum wage are making it more difficult for businesses to create lower-paid and part-time roles for workers.   

“The customer experience is suffering”

CEO of retail marketing agency Gekko, Daniel Todaro, agrees that the “increase in the minimum wage and employer national insurance contributions” alongside “growing operating costs and overheads” has “put retailers in a tight spot”.

“Retailers have been stretching their resources as far as possible, and they simply cannot afford to hire inexperienced workers” he argues.

“Regardless of age, staff numbers in retail stores have been reducing for some time, and with fewer roles – and a higher reliance on technology – the customer experience is suffering.”

Founder of luxury retail recruitment firm Fortem & Mode, Ceri Gravelle, acknowledges that retail “has long been one of the most important entry points into work for young people”.

However, she says: “When entry-level opportunities reduce, the impact is therefore much wider than on the immediate headcount.

“If fewer young people are allowed to gain early retail experience, the industry risks depleting its future talent pipeline.”

For retailers, it’s also worth bearing in mind that the physical retail sector is “evolving” in 2026, according to Rightmove Commercial. “At the centre” of its evolution is experiential retail, which “prioritises engagement, immersion and social interaction over simple transactions”.

Echoing this, Gravelle highlights that in-store retail “still depends heavily on people”.

“Technology can improve efficiency, but it cannot successfully replace warmth, brand storytelling or the ability to build trust and rapport with a customer,” she points out.

“If retailers reduce headcount too sharply at store level, service standards can suffer, and that has a direct impact on conversion, loyalty and brand perception.”

How can retailers navigate the crisis?

Head of the retail division at Everpool Recruitment Samantha Whitman argues that retailers are “trying to adapt” to the situation by “providing more structured entry-level training, shorter, more flexible onboarding, stronger links with colleges, and in-house work placements”.

“The retailers that respond now will be those that treat young workers as a long-term investment, not just an immediate cost,” she explains.

“Building clear progression routes, offering mentoring and making part-time roles more attractive could help retailers protect service standards while developing the next generation of retail talent.”

However, Todaro argues that although “retailers are doing all they can to navigate the issues they are facing” the “onus lies with the government”.

“Casual employment is a vital entry point to the workforce, building transferable life skills and enabling independence amongst young people,” he says.

“Not only does current policy conflict with the government’s goals to grow the economy and get more NEETs into employment, it also penalises UK businesses that are finding it increasingly more difficult to function successfully in an economy burdened by restrictive legislation.”

Gravelle concludes: “Ultimately, rising costs are forcing retailers to think more commercially about workforce planning and ROI. 

“But if the sector becomes too cautious with entry-level hiring, it risks solving a short-term cost challenge alongside creating a long-term talent shortage. They must get this important balance right.”

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Retail, in that version of the future, becomes faster, more automated, more predictive and less dependent on the concept of needing to travel to a physical location. The customer asks, the machine finds, the platform fulfils. The shop floor becomes a relic of an earlier, messier age.

It’s perhaps a compelling argument, given the ever-rising market share of online. However, it’s also fundamentally flawed.

Yes, there’s no denying that AI is changing physical retail, and quickly. It’s currently doing a stellar job of exposing tired stores, weak service, poor stock accuracy and retail models that depend on customers tolerating friction. But that’s not the same as saying that it will ultimately make stores irrelevant. In many cases, it will do the opposite.

The real threat is not to bricks-and-mortar itself, but boring bricks-and-mortar. The store that offers little more than shelves, queues and indifferent service will continue to struggle in an AI-shaped market – just take TG Jones as a prime example. If a customer can compare prices, read reviews, check availability and receive a product without leaving home, a poor store has very little left to defend. Habit won’t be enough, location won’t be enough, even range won’t be enough.

But the best stores have always offered something harder to automate. They give customers confidence via vital human connection, they edit choice with physical comparison, they create immediacy, and they offer increasingly important advice, reassurance, human judgement and a reason to spend time with a brand in the real world.

A recent ICSC and McKinsey report argues that as AI takes on more of the search and comparison process, stores are likely to become places for fulfilment, returns, product validation, immediate access and differentiated experiences. The same research found that 68 per cent of consumers had used at least one AI-enabled shopping tool in the previous three months, with 62 per cent using it to compare brands, models, prices or reviews.

In other words, the customer entering the store may already know more than they used to. That raises the bar for physical retail. It doesn’t remove the need for it. The store visit becomes less about basic information and more about certainty. Does this fit? Does it feel right? Is it worth the money? Can I trust this recommendation? Can someone help me choose without overwhelming me? Those aren’t questions that disappear because AI exists.

This is where the industry needs to be careful. Too much of the retail AI conversation still slips into a replacement mindset. Fewer people, fewer interactions, fewer costs. More automation presented as progress.

There will be areas where automation makes obvious sense. AI can improve forecasting, stock allocation, staff scheduling, returns processing and fulfilment. It can help retailers understand local demand faster and remove some of the operational drag that makes stores expensive and inconsistent.

The commercial case is strong; research cited by McKinsey and ICSC suggests that AI, automation and advanced analytics could increase retailers’ gross operating profit by up to 20 percentage points. AI-based demand forecasting could reduce stock-outs by 20 per cent and cut inventory costs by up to 10 per cent. Real-time in-store data could increase conversion by 15 per cent.

If AI can give associates better product knowledge, help managers plan labour more intelligently and make stock more visible across channels, it frees people to focus on the parts of retail where they make the greatest difference. Advice. Service. Problem-solving. Selling with confidence. Reading the customer in front of them.

That is why the smartest retailers won’t use AI to gut the store, but to make the experience more efficient and effective for customers.

Tecovas offers a useful example. The western wear retailer uses AI in its Boot Runner programme so store associates can request specific boots and have them brought to the sales floor in around 85 seconds. The technology does the fetching. The human stays with the customer during a purchase that can feel unfamiliar for a first-time buyer. As Tecovas’ chief technology officer Kevin Harwood put it, the brand has used AI to create a better human connection in store.

That should be the test for retail AI. Does it protect the customer relationship, or does it weaken it? The answer will separate good strategies from lazy ones.

The recent Andon Market experiment in San Francisco shows why full automation is a much messier prospect than the theory suggests. Andon Labs handed an AI agent called Luna a budget, a corporate card and the task of running a physical store. Luna could hire contractors, source products and make certain logistical decisions. It also exposed ethical and operational problems, including failing to consistently disclose that it was an AI in hiring conversations. At the time of reporting, the store was not profitable, with estimated monthly operating costs of roughly 14,300 dollars against revenue of 6,000 to 8,000 dollars.

What does this prove? That a store is more than a collection of technical decisions held together by inventory, labour and margin. It’s things that remain intaginble for an analytical technology. Mood, timing, trust, presentation, local knowledge, human behaviour and thousands of small judgements made across a trading day. The best store managers know when a display is not working before the data catches up. The best associates know when to step forward and when to leave a customer alone. The best retailers know that efficiency is valuable, but only if it improves the experience rather than stripping it bare.

AI can support those judgements. It can’t, and likely will never be able to, replace the need for them.

This is the strongest counterpoint to Jassy’s argument. AI may accelerate ecommerce, but it will also force physical retail to become more deliberate. Stores will need to know what they are for. Some will be built around convenience, with fast collection, returns, availability and operational ease. Others will be built around discovery, with curation, service, theatre and expertise. Many will need to combine both.

What they cannot be, is vague.

For years, too many stores have survived by being present rather than purposeful. That era is ending. If AI gives consumers more power before they arrive, the store must give them something better when they do.

That could be a faster trip, a better answer or a more confident purchase. It could be a product they can try, touch or take away immediately, perhaps a member of staff who knows enough to challenge the algorithm rather than simply repeat it. It could be a space that makes the brand feel more tangible, more trustworthy and more useful.

AI will become part of almost every serious retail operation. It will shape how retailers forecast demand, allocate stock, plan labour, personalise service and connect physical shops to digital channels. But in bricks-and-mortar, its highest value will not be in replacing the human encounter but materially making that encounter better.

The weak store will be exposed. The lazy store will be punished. The store that treats AI as a way to cut its way to mediocrity will find customers have better options elsewhere.

But the store that uses AI to become sharper, faster, more informed and more human has a very different future. And it’s this, that Andy Jassy simply doesn’t understand.

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For many retailers, the conversation around artificial intelligence still begins and ends with generative AI.

Chatbots, content tools and customer-facing assistants have dominated the discussion since the arrival of large language models in the mainstream. They are highly visible, easy to understand and simple to demo in the boardroom.

But according to Dr Daniel Hulme, CEO and founder of enterprise AI business Satalia and chief AI officer at WPP, that narrow view risks distracting retailers from where AI can make the most meaningful difference.

“Most people think AI is generative AI,” he says. “The reality is there are many different types of algorithms out there that we bundle in terms of what we call AI, from machine learning to optimisation.”

Hulme has spent more than two decades researching, building and implementing AI systems. Satalia, founded in 2008 and later acquired by WPP, has worked with companies including Tesco, DFS, Waitrose and The Coca-Cola Company. Its expertise sits in the less glamorous but commercially critical world of optimisation, operations research, machine learning and decision intelligence.

In Hulme’s view, generative AI is only capable of addressing a relatively small slice of the friction inside a retail business.

“If I’m being totally honest, I think generative AI probably can address about 10 per cent of the frictions across the retailer supply chain,” he says. “You get the biggest bang for your buck if you use optimisation algorithms.”

For retailers under pressure to reduce cost, improve availability, protect margin and serve customers faster, that should be a wake-up call. AI’s greatest value may not be in the front-end experiences everyone can see. It may be in the invisible systems deciding how vans are routed, how stores are staffed, how engineers are allocated, how stock moves and how capacity is unlocked.

Where AI actually creates operational value

One of Hulme’s clearest examples comes from Tesco’s last-mile delivery operation.

Around 12 years ago, Satalia built Tesco’s last-mile delivery solution after the retailer concluded that no existing system could deliver the level of performance it needed. The challenge was not a chatbot problem. It was a series of optimisation problems, each with its own technical complexity.

When a customer enters their address and asks to see delivery slots, the system has to calculate how long it would take to get from that address to existing stops in the schedule. That means producing what Hulme calls a travel matrix in milliseconds.

“If you go and ask Google Maps, give me 1,000 routes, it’s going to take several minutes,” he says. “To be able to create 1,000 or even 3,000 routes that are accurate in 100 milliseconds required us to build bleeding-edge routing algorithms.”

The system then has to decide which slots can be offered, optimise the schedule between one customer booking and the next arriving, then later rebalance routes across drivers so workloads are fair, vans are staggered and capacity is maximised.

The impact was substantial. Hulme says the work helped Tesco save around 20 million miles a year, reducing carbon emissions while unlocking greater delivery capacity.

Satalia has since applied similar thinking to Waitrose, as well as middle-mile challenges such as moving goods from depots to stores. Hulme says a middle-mile project for Tesco took seven years to solve because the problem had never been cracked in that way before. Once solved, however, the underlying innovation could be deployed elsewhere far faster.

“The reason why it took seven years is because that problem had never been solved before,” he says. “But by solving that problem, we can now deploy that new innovation to another company in three months.”

That is a critical point for retailers. Bespoke AI doesn’t always mean starting from zero. Some underlying algorithms can be repurposed across organisations, while others must be tuned to the specific shape of the business.

A grocery drop may have relatively predictable delivery characteristics. A sofa delivery may take anything from 10 minutes to three hours, depending on access, installation and the reality of the customer’s home. The model has to understand the difference.

The hidden value in workforce and store optimisation

The same logic applies beyond vans and warehouses.

Hulme points to work with UK Telco, where machine learning was used to predict the nature of infrastructure faults, the skills of engineers and how long each engineer might take to solve a specific issue. The aim was to stop sending people to jobs they were not best equipped to complete.

“That project had a 200 times return on the investment,” he says.

In retail, a similar approach can be applied to store labour. Hulme cites DFS, where Satalia used machine learning to predict store footfall and customer demographics, then optimisation to allocate the right staff against the shape of demand.

Many retailers still roster teams in ways that are too blunt. A store may be staffed in similar patterns across the week, despite customer behaviour changing sharply by day, hour and demographic. Matching labour to demand is not just an efficiency play. It can directly influence sales, service quality and employee experience.

That wider view is important. Hulme argues AI should not be used to chase a single KPI in isolation. When it is, businesses can end up improving one metric while creating problems elsewhere.

He points to work with a leading accountancy firm, where Satalia built an algorithm to allocate thousands of auditors to jobs. The goal was not simply to increase utilisation. It was also to reduce travel time, improve employee happiness and strengthen client continuity.

“AI can improve all of your KPIs, not just one of them,” Hulme says. “If you focus on just one KPI, it can massively overachieve that goal, and by overachieving that goal, it can then actually cause harm elsewhere in the supply chain.”

For retail leaders, this may be one of the most important lessons. AI cannot be treated as a bolt-on efficiency project. It has to be understood as an operating model issue.

Start with frictions, not technology

If retailers want to move beyond hype, Hulme believes they should begin by listing the frictions across the organisation.

That means identifying where work is slow, repetitive, costly, unpredictable or constrained. Some of those problems may be solved with simple automation. Some may be addressed by buying mature third-party software. Others may require specialist AI expertise and custom-built solutions.

He describes it as a three-part strategy.

First, employees should be given access to tools that help them innovate at the edge of the business. Second, companies need to identify the hard problems where deep specialist expertise can create competitive advantage. Third, they should use partners and existing AI products for back-office tasks they do not need to build themselves.

“Start with listing all your frictions and then start knocking them off one by one by either building them, co-creating them or buying them,” he says.

This is also where the data conversation needs to mature.

For years, retailers have been told to build data lakes, unify everything and wait until their data is ready. Hulme is blunt about that approach.

“Don’t wait for your data lake to be ready. Your data will never be ready,” he says.

Instead, he argues that businesses should start with a clearly defined problem. Once the objective and constraints are understood, the necessary data becomes clearer.

In the accountancy firm example, the problem was how to allocate staff more effectively to jobs. That meant defining the objective function, such as maximising utilisation and minimising travel time, then mapping the constraints, such as availability, skills and client requirements. Only then does the data challenge become practical.

“A problem well defined is half solved,” Hulme says.

That does not mean data quality is unimportant. Poor data can produce poor decisions. But retailers should not confuse imperfect data with unusable data. In many cases, data issues only surface once a system is tested in the real world.

From optimisation to digital twins

The longer-term opportunity is not just solving individual operational problems. It is connecting those solutions together.

Hulme believes retailers should ultimately be working towards digital twins of their organisations, allowing them to model how one decision affects the wider system.

For example, a marketing campaign may increase demand by 10 per cent. But can suppliers cope? Is there enough warehouse space? Are there enough drivers? Can stores fulfil demand? Will the customer promise hold?

“Most retailers, because they are siloed, can’t project those questions across their supply chain,” Hulme says.

The promise of AI, he argues, is to create a simulation layer that allows retailers to test those scenarios before they become operational problems.

DFS offers a clear example of where this can lead. Satalia worked with the retailer on last-mile and middle-mile delivery, then helped build towards a broader digital twin. Hulme says DFS later platformised some of that delivery innovation through The Sofa Delivery Company, turning what began as an internal capability into a revenue-generating opportunity.

“That is the opportunity with AI,” he says. “If you build something that is genuinely differentiated, you can turn it into a revenue generator.”

Why quick wins can be a trap

Retailers are understandably under pressure to show progress. Boards want AI strategies. Shareholders want evidence of adoption. Leadership teams want quick wins.

But Hulme warns that quick wins can be misleading.

Most low-hanging fruit, he says, can be solved by third-party tools at a fraction of the cost. The problems that create true differentiation are usually not quick or easy.

“You need to focus on the problems that are going to differentiate your supply chain,” he says. “And those problems are not quick and they’re not easy.”

That creates a difficult challenge for C-suite leaders. They are being bombarded with AI vendors, consultancies and platforms. Many are being told to build internal teams, launch pilots or adopt the latest agentic tools, often without a clear view of what problem they are actually solving.

Hulme is sympathetic to that pressure but firm on the risk.

“Organisations can’t afford over the next three to five years to place the wrong bets,” he says.

The agentic AI ‘reality check’

No AI discussion in 2026 can avoid agents.

Agentic AI has rapidly become the industry’s latest obsession, promising autonomous systems that can take actions, complete tasks and collaborate with other tools or agents. Hulme believes agents will become hugely important, but he is clear that the market is still immature.

He compares the current agentic moment to the big data boom.

“People think everybody’s doing it, nobody’s doing it, but if they are doing it, they’re doing it badly,” he says.

The difference, he adds, is that agents will eventually drive real value. The danger is that companies deploy them before they know how to verify whether they work.

Large language models, he argues, are still like “intoxicated graduates”. They can be impressive, but giving them agency across a business without proper testing could create serious harm.

The issue is not just security or performance. It is functional verification. If an agent is built to optimise a media plan, for example, can the business prove it will do that well? If it is given a £1m budget, can the business be confident it will not spend it badly?

Hulme believes this will become one of the defining governance questions of the next phase of AI adoption.

The message is becoming increasingly clear. AI agents may be coming, but they need structure, accountability and verification before they are trusted with meaningful business decisions.

The real competitive divide

Hulme’s view of AI in retail is both optimistic and cautionary.

The technology can unlock capacity, reduce waste, improve service, support employees and create new revenue streams. But only when retailers understand the difference between shiny tools and strategic capability.

Understanding where those key frictions are, which problems are worth solving, which capabilities are differentiating, and which experts they need around the table, is fundamental to building AI-centric solutions that have longevity.

But that requires a shift in mindset. AI is a way to rethink how the business allocates resources, predicts demand, responds to complexity and makes decisions at scale.

That work is harder than launching a generative AI pilot, but it’s also where the real value lies.

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A new cold-brew tea bag from Lipton Teas & Infusions suggests how far that change could go. Designed to be dropped into a refillable water bottle, it turns plain tap water into flavoured iced tea, aimed at consumers who already carry reusable bottles and rarely think twice about filling up from the tap.

The product also comes amid the rise of Gen Z becoming a core drinking cohort, growing scrutiny over single-use plastic and a drive from retailers and suppliers to reduce cost and made the supply chain more efficient.

And for Lipton, it is also a bet that tea can move beyond its traditional hot-drink identity without losing what made it a staple in the first place.

Retail Gazette sat down with at Lipton Teas & Infusions UK&I CMO Elle Barker, who explains how the brand is thinking about demand, regulation and the future shape of the category.

1. Your new cold-brew tea bag range targets what you call the “tap water occasion”. How significant is this shift away from ready-to-drink beverages for your overall supply chain and distribution strategy?

We see this less as a shift away from ready-to-drink and more as the opening up of a new and fast-growing occasion.

Hydration is one of the biggest drivers in the beverage space today, with consumers increasingly looking for products that fit seamlessly into their everyday routines while still delivering on taste and wellness. Within that, what we’re calling the “tap water occasion” is particularly interesting — it’s about enhancing something people are already doing multiple times a day, rather than asking them to adopt a completely new behaviour

Younger consumers are a big part of this. They are typically heavier water drinkers and are also more engaged with trends around customisation, function and flavour. At the same time, they’re leading the shift towards sustainability, with growing adoption of refillable bottles and a desire to reduce reliance on single-use plastic. That combination creates a clear opportunity to rethink how we deliver refreshment

Cold-brew tea bags are a very natural fit for that space. They allow consumers to transform tap water into something more interesting and enjoyable, without needing refrigeration, additional packaging or a ready-made beverage. In contrast to traditional ready-to-drink formats, this approach can significantly reduce packaging intensity and associated environmental impact, which is an increasingly important consideration across the beverage industry.

Ultimately, the goal is to make hydration more enjoyable while aligning with how people want to live today. If we can help consumers drink more water, enjoy it more, and do so with less reliance on plastic packaging, that’s a win both for the category and for the environment.

2. Gen Z is driving demand for cold tea and healthier options. How is this influencing your long-term product development?

Gen Z is definitely accelerating change in the category, but we see it as an opportunity rather than a challenge for tea.

Tea is uniquely well positioned to meet a lot of the needs we’re seeing from younger consumers. At its core, it’s naturally low-calorie, often zero-calorie, and free from artificial ingredients, which aligns very well with the shift towards cleaner, more functional drinks and everyday wellness.

What’s also interesting is that Gen Z are much more open to exploring new flavours, formats and rituals. They’re not necessarily tied to traditional hot tea occasions in the same way previous generations were, which gives us a real opportunity to reframe tea in a way that fits more seamlessly into modern lifestyles — whether that’s cold formats, hydration-led occasions or more customisable drinks.

That’s directly shaping our long-term product development. We have a strong pipeline of innovation focused on recruiting the next generation of tea drinkers by leaning into both format

and function. A good example of that is our work in areas like matcha, where products such as the Lipton Matcha Latte bring together taste, energy and a more contemporary usage occasion.

Overall, the focus is on evolving tea without losing what makes it special — delivering great taste and natural credentials, but in formats and experiences that feel relevant for how younger consumers live today.

3. Tea consumption has traditionally been seasonal. Do you expect cold-brew formats to stabilise demand throughout the year, and what would that mean for forecasting and inventory management?

F&H Tea consumption drops -17% in Summer vs Winter (Source: Nielsen F&H Cups sold, Total Market – Quarterly to w/e 4/10/25) Tea has traditionally been a more seasonal category, with a clear drop in consumption as the weather warms — for example, fruit and herbal tea consumption declines by around 17% in summer versus winter. That’s been a structural challenge for the category for years.

What cold-brew formats do is open up a much more natural role for tea in warmer months. Rather than asking consumers to change behaviours, we’re simply better meeting a need that already exists — hydration and refreshment when temperatures rise — but doing it in a way that feels lighter, more convenient and more relevant to summer occasions.

Products like Lipton Ice Tea tea bags are a great example of that. They allow consumers to enjoy tea as a cold, refreshing drink, directly from water, without needing to switch into a completely different beverage category. That helps keep tea relevant year-round rather than being overly concentrated in colder months.

From a commercial perspective, if we can smooth some of that seasonality, it has real benefits. It allows for more consistent demand across the year, which in turn supports better forecasting and more stable production planning. Instead of peaking heavily in winter and softening in summer, you start to build a more balanced demand profile.

It also makes inventory management more efficient. With less extreme swings, there’s reduced risk of both overstocking and stock-outs, and it enables a more even flow through the supply chain.

Ultimately, the opportunity is to evolve tea from being perceived as a more “winter-led” category into one that has relevance across a broader range of occasions. Cold-brew formats are an important step in that direction, helping the category stay visible and competitive when consumers are naturally shifting towards colder, more refreshing drinks.

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