Retail Industry in The Changing Global Business Landscape 2023

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Table of Contents

Introduction......................................................................................................................................3

Retail Industry Outlook – United Kingdom....................................................................................3

Navigating the Changing Landscape of International Business......................................................5

Impact of Inflation on Global Retail Sector................................................................................5

Impact of COVID-19 on the Global Retail Sector......................................................................7

Acceleration of E-commerce and Operational Challenges......................................................7

Supply Chain Resilience and Technology Adoption...............................................................8

Impact of Climate Change on Global Retail Sector....................................................................9

Conclusion.....................................................................................................................................10

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Introduction

The global business environment is currently undergoing a radical change that is marked rapidly

increasing diverse factors, which create both challenges and new opportunities for international

enterprises (TAMER et al. 2019). Technology, globalisation and a new focus on sustainability

has changed the norms of interaction in the commodity phase for our retailing industry with

turnover that oscillates according to consumer dynamics and market trends (Dabic et al.

2021). Due to globalisation, businesses now consider digital transformation as a crucial strategic

choice in today's environment. In the past, it was merely seen as a strategy.

The objective of this review is to reveal the impact of strategic approaches on addressing the

major aspects, like inflation, the residual impacts of COVID-19, and the implementation

sustainable practices in terms of the larger domestic retail landscape. Through the analysis of the

industry as a whole, this review informs regarding the issues and measures that are relevant to

different participants in the UK retail market, thus assisting to describe a dynamic environment

that defines the direction of this sector’s development.

Retail Industry Outlook – United Kingdom

The global retail industry, with sales exceeding 495.71 billion British pounds in 2022 and

a projected 6.9% growth, shapes a dynamic market landscape (Statista 2023a). Within this

expansive sector, the United Kingdom's retail scene stands out, characterised by diverse players

contributing to the industry's vibrancy. The UK's retail sector exhibits resilience and adaptability

in response to evolving market dynamics. The sector encompasses various revenue streams,

spanning groceries, clothing, and household goods, reflecting the diversity and competitiveness

of the UK retail market (Statista 2023a).

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Figure 1: Global Retail Sales Growth (2005-2022) (Statista 2023a)

The UK's retail sector has witnessed substantial growth and adaptation since the early

1990s, mirroring global trends while maintaining a robust position with noteworthy market

shares. Unique business models employed by diverse retail entities contribute to the sector's

overall resilience and profitability. Financial success indicators, such as total revenues,

underscore the sector's prowess. In the fiscal year concluding on April 1, 2023, the UK retail

industry reported substantial revenues, marking significant growth compared to preceding years.

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Figure 2: Projected Global Retail Sales Growth (2020-2025) (Statista, 2023b)

Navigating the Changing Landscape of International Business

This section examines the transformative elements influencing the global retail landscape in

2023. It looks into the impact of technological advancements, globalisation, sustainability, and

the COVID-19 pandemic on operations and strategic approaches of various retail entities. While

these factors offer opportunities like improved operational efficiency and market expansion, they

also bring forth challenges, including cybersecurity threats, geopolitical risks, and escalated

operational expenditures.

Impact of Inflation on Global Retail Sector

The degree of Inflation is one concerning the international retail sector which in a roundabout

way influences various focal points of the industry. Consumer behavior, time and in turn,

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activities of operations costs as well as the general equilibrium structure of the retail market can

undergo a radical change with inflation which refers to persistent increases in the price level for

goods and services commodities.

The cases from the International Monetary Fund reports in 2022 indicate that a huge financial

crisis is now transpiring. It states that the global financial crisis has provided grounds for

challenges pertaining to changing world characteristics by embracing issues of global

perspective and a rise in expenditures on traded goods internationally (Wullweber 2020). This

poses challenges with business replying since most of the consumer trends shown depend on

such circumstances on which consumers spend money (Collinson et al. 2020). Solving financial

issues will require equitable strategies such as changes in pricing depending on market demands,

the value-oriented product offers, and efficient restructuring of operational costs to keep it

financially viable over time.

As per Khan and Abbas (2023), inflationary pressures coupled with the changeable environment

of retail sector leave an influential mark on coveted brands within the industry where adaptation

to sustain growth becomes forgoing due inflammatory situation. The current example of the

British industry shows that inflation embodies several challenges and responses. As also pointed

out by Salim (2019, p. 348), inflation has the negative effect of reducing the buying power of

consumers as their cost rises over time. This can cause a decline in Decision Support System

(DSS), impinging on the merchant line of business. Consumers get more influenced by price,

buy only what is indispensable and economise purchases of non-primary or luxury goods. As a

result, retailers may see changes in trends and tastes surrounding demand. Some of the recent

initiatives within the sector demonstrate a sense of proactiveness towards inflation prevention on

consumer patterns.

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According to Olusola et al. (2022), one positive impact of inflation is the potential for debt relief.

When there is moderate inflation, the real value of money decreases over time. In a scenario, the

opportunity is where individuals or entities have borrowed money and are required to repay it

with interest, inflation can effectively erode the purchasing power of the currency. This concept

is particularly relevant to fixed-rate loans, such as mortgages, where the interest rate is set when

the loan is originated. As inflation occurs, the actual cost of repaying the loan decreases in real

terms, potentially benefiting borrowers.

According to Leijonhufvud (2019), inflationary pressures can disrupt global supply chains,

affecting the availability of goods. Fluctuating currency values and increased costs of production

and transportation may lead to delays and shortages. Retailers may grapple with inventory

management challenges, impacting their ability to meet customer demand promptly. The ability

to navigate these complexities underscores the retailers’ adaptive strategies in the face of

inflation.

Impact of COVID-19 on the Global Retail Sector

The seismic impact of the COVID-19 pandemic has reverberated across international business,

reshaping the retail landscape and prompting significant adaptations in supply chain

management. The retail sector, as a whole, serves as a compelling reference point for

understanding the multifaceted repercussions of the pandemic.

Acceleration of E-commerce and Operational Challenges

The shift towards e-commerce globally has been fast-tracked by the pandemic and Marks &

Spencer has followed suit. With stringent lockdown restriction measures and social distancing in

place, there has been a notable drive among consumers to shop online (Basu et al. 2023). This is

an opportunity that has been central to the sector, seeing a significant rise in its own online sales.

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Yet, as Marinov and Marinova (2020) note, with demand in the sector also spiking, the brand’s

operational challenge, like many others, would have primarily concerned supply chain

management and living up to the ever-higher consumer expectation of getting their goods to

them speedily and reliably.

According Mithani et al. (2022), global supply chains, of course, were hugely disrupted in the

pandemic era, resulting from numerous factors: lockdowns, restrictions on travel and the way

people consumed, but also because many businesses were simply not operational. For the retail

sector, these disruptions translated into increased operational costs and necessitated a

recalibration of supply chain strategies to enhance resilience and responsiveness.

Supply Chain Resilience and Technology Adoption

Rajagopal and Ramamoorthy (2023) note that a cautious nature of supply chain management has

been getting more yet also the start, during the pandemic. However, retailers being aware of the

risks that might arise due to delays or disruptions had to switch strategically to the continuity

presented. As the time-duration of lockdowns became longer, this caused a strategic response,

with utilisation of technology like Robotic Process Automation (RPA) which assist in automating

and securing essential and necessary processes under minimal collisions of human resource

requirements.

According to Karmaker et al. (2023), a new vision of supply chain networks should be

established after the COVID pandemic, as trends in recent technological developments promote

renewal or reconfiguration of traditional supply chain networks. This paradigm shift is also

evident in the sector that aims the retail, which supports the concepts of Industry 5.0 that serve a

vital role in the development of sustainable and unified operations to overcome the challenges

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that have been presented due to the extended disruptions with maintaining the long-term

manufacturing of supply chains (Hill and Hult 2018).

Impact of Climate Change on Global Retail Sector

Climate change has also become a new business challenge across the globe, with corporate

strategies accommodating consumer demands and climate governance structures (Laszlo et al.

2020, p. 8054). One way to do this is through the humanisation of actions and activities within an

organisation and is usually done by breaking big chunks into smaller ones so that actions can be

taken in shorter bursts.

Morrison (2020) shows that the narrative aims to showcase sustainability runs like a thread in

keeping up with changes taking place in the retail industry. The retail sector has adopted this

mindset change in particular, with the current generation becoming more sensitive towards the

environment at a global scale (Castellani et al. 2022). The adoption of greens practices by

retailers does not only help it to achieve the latest expectations but also promises new consumers

who appreciate business-oriented companies in terms of environmental sustainability and social

responsibility.

The implementation of sustainable practices stretches beyond the immediate gains, with profits

being reinvested in the generation of further benefits from relationships built with reputable

brands over long periods. Green technology initiatives like energy saving achieve this by

portraying retail brands as responsible actors in a world where the fact that the retail sector is

constantly evolving into a global system that is increasingly cautious about environmental

sustainability quality brands (Agu et al. 2022). This coordination with the new-values that

customer place in, creates a symbiotic relation between profits with a socially accountable

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marketing strategy, that will represent the competitive forces behind a lively retailing

environment.

Dang et al. (2020) findings indicate that environmental friendliness plays twofold roles by being

both right in ethical terms and strategic advantageous factor for the development of companies.

The incorporation of sustainability in the operations of business is not just a mere compliance

measure for the retailers; rather sustainability transforms into the heartbeat of their business. M

& S, as a retail giant, demonstrates its dedication through various practices beginning with

supply chain issues and reaching the shelves on retailers where the distinction products are

displayed and achieving an intimate perception of the reducing the carbon footprint.

Conclusion

In summary, the contemporary world of the global business, that is influenced by technology

innovations, globalization, and the increasing importance of sustainability, creates both threats

and opportunities for international enterprises in diverse sectors. As a whole, the retail industry

handles these complicated emergencies, and the case study of a leader, for instance, M&S,

provides useful information concerning, resilience and adaptability. By studying the plans used

by retailers in response to major drivers such as inflation and COVID-19’s lingering effects, their

multitudes come into full view, revealing the complexity of the field for year 2023. The industry,

thus, represents strategic responses, technological integration, and a focus on sustainability as

essential elements of survival strategies, underscoring the importance of ongoing innovation and

adaptability in the dynamic world of business.

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