What you will learn in this chapter:
- Where retailers are pinning their biggest investments in 2026, from technology and stores to people and culture
- Which marketing channels are driving the greatest returns
- How leaders are prioritising cybersecurity and cracking down on retail crime
Retailers are constantly presented with an endless shopping list of potential investments. The tricky part is knowing where to place their bets.
Chapter one revealed that retailers are reducing their planning from five years to three years. But, in reality, success rests on knowing when to reach for that tempting low-hanging fruit and when to play the long game.
As UK retailers look ahead to 2026, investment strategies are revealing a sector focused on transformation, resilience and smarter customer connection.
From overhauling store estates to leveraging AI, the industry’s top leaders are putting their capital – and confidence – into five critical areas. Here are the key investment trends that our research reveals will define retail in 2026.
1. Tech transformation and the age of AI
Retailers across the board are backing technology as a core engine for growth, productivity and insight – particularly AI and automation.
Not On The High Street chief executive Jessica Nesbitt sees AI as fundamental to solving customer complexity. “We are investing in AI-driven search, browsing and recommendations so customers can really be matched with the right product on the site.
“We‘ve got a catalogue of over 350,000 products. So it‘s critical for a marketplace business to have really, really good tooling in that respect.”
BrandAlley chief executive Rob Feldmann also cited AI as one of the biggest levers: “It’s changing so quickly… there’s going to be significant improvements that we can make to our product attributes and our copy. If you can improve the search functionality on your site, you get better conversion.”
Matalan chief retail officer Katherine Davis says the retailer has “big IT projects in the works”. Highlighting a multi-faceted tech upgrade, she adds: “We’re making significant investments in our EPoS and till systems to help colleagues serve customers more quickly and efficiently.
“Looking ahead to 2026, we’ll also be looking at avenues including in-store Wi-Fi, footfall-tracking technology and RFID [radio frequency identification], which helps to automate stock counting and reduce menial workload, saving colleague hours for jobs that require a human touch.”
The guiding principle behind these investments, she says, is making it easier for colleagues to support customers, either by equipping them with the right tools or freeing up their time through smarter systems.
Similarly, former Mamas & Papas chief executive Nathan Williams ties digital investment directly to customer experience. “We’re investing in user experience and CRM [customer relationship management]. We have to set ourselves up for the customer of the future,” he says.
N Brown executive chair and chief executive Steve Johnson sums it up by saying AI has changed the game. He adds: “I firmly believe in business evolution through technology – these are difficult times for retailers and success means being streamlined, efficient and ready to adapt to a rapidly changing landscape.”
“We are investing in AI-driven search, browsing and recommendations so customers can really be matched with the right product on the site”
“These are difficult times for retailers and success means being streamlined, efficient and ready to adapt to a rapidly changing landscape”
Miniso is aiming to open around 20 stores this year (Miniso)
Miniso is aiming to open around 20 stores this year (Miniso)
George at Asda has plans for 100 standalone stores (Asda)
George at Asda has plans for 100 standalone stores (Asda)
2. A revival of physical retail
Despite the rise of ecommerce, physical stores are far from dead – in fact, many CEOs see them as a key differentiator in their omnichannel strategies. As described by HMV managing director Phil Halliday, “the store environment is absolutely fundamental to our DNA”.
“Human beings at their very core are people that like to go out,” says Miniso chief operating officer Saad Usman. “They like to touch and to feel… to experience.
“You want to go and touch and feel what you’re about to buy, and that’s why we continue to invest, why we are aiming to open around 20 stores this year and keep pushing ahead on that sort of trajectory over the next two to three years.”
Asda non-executive director and audit chair Jo Whitfield, who is also chair of the British Retail Consortium, says the grocer – which was overtaken by Aldi as the UK’s third-largest grocer by market share in May 2025 – will be giving its stores more “love and attention”.
She adds: “We will be refitting and refreshing some of our stores, which then means that the work we’re doing around value [price is another key focus for the retailer] and product and service is actually showing up the way we want it to in shops that we’re proud of.”
Dobbies chief executive David Robinson says store refurbishment is the garden centre retailer’s number one investment priority for 2026, having completed three this year, with another 10 to 15 in the works.
He says the refurbishment programme is already proving worthwhile: “We’re very excited about those because they actually change the way colleagues feel about the store. They are improving our NPS [net promoter score] and we’re seeing the financial returns as well.”
George at Asda vice president Karl Doyle reinforces the retailer’s commitment to physical presence as it takes aim at rival Primark. “We’ve been clear in our ambition to open up more standalone George shops,” he says. “Our long-term aim is to overtake Primark as the number one volume retailer in the UK. Now, they’ve done such an amazing job for 15 years. That is not an easy gig.
“Stores form probably the biggest part of that mission, if I’m being honest, and we are currently looking to put at least 100 standalone George stores up and down the country. That is going to come at a significant cost, as you can imagine, and an investment.”
British travel apparel brand Antler is also eyeing store openings in the UK. Chief executive Kirsty Glenne reveals: “We’re still very early in our retail strategy… we’re just looking for the right stores, but the investment is lined up to do that as soon as availability comes our way.”
Meanwhile, Bensons for Beds chief executive Nick Collard wants to scale his business’ store estate back up, following its shedding of 100 stores when it went into administration five years ago.
“We’ve got a publicly stated aim of wanting to get back to over 200 stores, and we’ve got about 180 now. We think there’s another 20 to 30 store locations around the country that we’d like to open in,” he says.
Physical stores are more than just shops – they become fulfilment vehicles, create a halo effect for online sales, evolve into third-space community hubs, encapsulate brands and critically, act as conversion engines.
3. People power: Talent, training and culture
Investment in talent is becoming a defining theme, especially among leaders focused on internal culture and customer-facing teams.
Collard says people are Bensons for Beds’ number one investment priority: “Unlocking the power of our people… is our single biggest asset. We’ve put a lot of money in and we want to continue to do that over the next few years in terms of really investing in leadership, training and development of those teams.”
The boss of a premium fashion retailer also recognises the value of empowered teams: “It will continue to be a real focus for us. If our team don’t feel good, it’s not going to happen.”
Echoing this sentiment is Fortnum & Mason chief executive Tom Athron, who told Retail Week that the business can “draw a direct link between the activities they have under the DEI space and how happy and engaged” teams are, emphasising that investment in people is “more important now than it ever has been”.
No matter the type of retail organisation, the trend towards increased investment in people development was evident.
At Pets at Home, investing in store colleagues goes hand in hand with tech investment. “I really believe in a mobile-first world for retail with colleagues, so we have handheld devices, headsets and so on, just investing and making sure they have the best tool for the job,” enthuses chief operating officer Anja Madsen.
“We’ve started investing in AI. So, for colleagues, say they get a question from a customer, they can speak into the headset and the AI will look through all of our databases and find the right answer. We’re also investing in learning and development, particularly around new management and leadership training.”
PureSeoul chief executive Leslie Tang explains that the K-beauty brand is focused on strategic hiring: “We’re heavily investing in building the right leadership and operational teams to support sustainable growth.”
Morrisons has taken staff training and development a step further, opening the Sir Ken Morrison Leadership School in July 2024. The programme offers leadership and technical training, with participants also undertaking a business-relevant project and sitting an exam.
Chief executive Rami Baitiéh explains: “Diversity and inclusion is a very important topic for me and… this school is open to everyone. All of the 100,000 colleagues in Morrisons. There’s no need to have your résumé or CV; you just go to study. There’s not a manager selecting the people who will be promoted… they will self-identify for future learning opportunities.”
He explains that this opt-in method is proving fruitful. While 25% of the current leadership is female, at the leadership school – which is training the managers of the future – 40% of students are female. And while 7% of managers would currently identify as being from underrepresented backgrounds, in the leadership school this statistic rises to 19%.
Retailers are realising that strong business performance starts with stronger people: equipped, engaged and enabled.
“We’ve started investing in AI for colleagues. We’re also investing in learning and development, particularly around new management and leadership training”
“Our leadership school is open to everyone. All of the 100,000 colleagues in Morrisons. There’s not a manager selecting the people who will be promoted… they will self-identify for future learning opportunities”
4. Streamlining supply chain
From fulfilment centres to smarter stock systems, many retailers are funnelling funds into making supply chains faster, leaner and more reliable.
In October 2022, The Entertainer began its partnership with Tesco through a trial in 35 stores, rolling out to 850 in January 2024 and to more than 2,000 Express stores in 2025. Perhaps unsurprising, then, that group chief executive Andrew Murphy cites supply chain and logistics as his number one investment area.
“We’ve been planning the redesign and upscaling of our full UK logistics network,” he says. “We’re now on the verge of making the appointment of the partner who’ll support us to do that, and then we’ll be executing it over the next 18 months. That is by far and away the single biggest investment that we’ll make.”
Miniso’s Usman stressed the power of integrated tools: “We’ve invested in an auto-replen system – alongside a visualisation tool for our stores – to improve our stock deliveries, etc., getting the right product in the right quantity in the right place – we’ve become more efficient at that.”
Popcorn brand Joe & Seph’s is also investing in supply chain machinery, not for its product – where its ‘handmade’ USP will remain intact – but for its packaging, to speed up labelling and boxing.
“We’re going to invest in machinery to improve the capacity to get more out the door,” says chief executive Adam Sopher. “Whether we can achieve an extra £1m in sales without having any additional labour cost will be how [return on investment] is measured.”
Matalan is also upping its investment in supply chain, particularly around automation and robotics, says Davis. “This includes a multi-year project to upgrade our warehouse infrastructure, with new automation from Knapp. We’re rolling out OSR systems too – robotic pickers that operate at speed and with precision to help us get products out the door faster and with greater accuracy, all while keeping costs low.”
The investment has already delivered – with order cut-off times extended to 10pm – and Matalan is now looking to bring the same automation capability into its retail operation. This means it will be able to pick and dispatch store orders more quickly and accurately, ensuring the right products land in the right locations at the right time.
In 2026, supply chain strength is a brand advantage – one that’s measured in faster delivery, lower costs and better availability.
“We have a huge amount of customer data because we’re purely online. So we probably have one of the best data sets of any retailer”
Selfridges is investing heavily in its membership proposition (Selfridges)
Selfridges is investing heavily in its membership proposition (Selfridges)
5. Customer-centric innovation
Retailers are going beyond price and promotion to create value through loyalty, personalisation and product relevance.
The Very Group chief executive Robbie Feather lists personalisation as the etailer’s number one investment priority. “We’re an unusual business in that we’ve got a very big financial services business – 90% of our customers have a credit account. We have a huge amount of customer data because we’re purely online. So we probably have one of the best data sets of any retailer.”
This data will help The Very Group be more targeted – both in the products it surfaces to customers and by offering them more relevant financial packages.
N Brown is also investing in financial services in 2025, says Johnson. “We pride ourselves on being able to offer convenient and flexible finance to our customers, and an investment focus for 2026 will be the development of a unique financial services platform for our customers.”
Leonie Foster, chief operating officer at Selfridges, sees membership as key: “We’re heavily investing in our customer agenda, continuing to evolve our Selfridges Unlocked membership programme with enhanced rewards, more engaging programming and the launch of an exciting new customer destination.”
Holland & Barrett is focused on forging long-lasting customer relationships, says chief executive for wellness solutions Tamara Rajah.
“It’s not just grouping things together under the heading of immunity, but how can we really design an end-to-end customer journey and proposition?” she says. “Which means the solutions, products, advice and more that mean we can offer the right solution to the customer around those wellness missions.”
Customer service is also high on the agenda at The Cotswold Company. Tucker is betting on superior service: “We deliver products into people’s lounges and bedrooms, so we need to do that with a sense of integrity and dignity.” To this end, the retailer is opening a second delivery hub near Stanstead in October, and a second distribution centre near its recently opened site in Lichfield, Staffordshire, as well as investing in training for its driver teams.
For Morrisons, Baitiéh explains the grocer’s point of differentiation comes through “service that nothing will replace”. He explains that Morrisons is determined to “ensure every customer feels valued and comes first, no matter how they choose to shop with us.”
“Customers, after or before they shop, they go with their family and friends to sit in the cafe… they have a nice, comfortable moment,” he says. “On Market Street, you can buy your salad, you can buy your pizza, you can mix your bakery. You can speak to the butcher and say, ‘I want this for a barbecue – what do you think about that?’”
Gracie Tullio of PureSeoul is blending CRM and loyalty as an embedded part of the brand’s DNA: “We’re building a one-of-a-kind, Korean-inspired loyalty programme designed to drive customer retention and acquisition,” she says.
“ROI will be measured through repeat purchase rate, increased customer insight/preference data (such as skin type data and skincare interests/dislikes), order and lifetime value increases, and overall programme engagement, which we will use to direct our future promotion planning.”
The most successful retailers in 2026 will be those who invest in building stronger, more enduring connections with their customers – not just better sales funnels.
Share of voice: Getting the message out
One thing is clear, marketing strategies are evolving rapidly, with a sharp focus on effectiveness, measurement and integration. The business leaders we interviewed detail a wide array of marketing tactics being deployed.
While paid search (pay per click – PPC), email and social media continue to deliver strong ROI, the prevailing theme is that no single channel is king. As Antler’s Kirsty Glenne puts it “we are pretty obsessed with full funnel strategy”.
Throughout 2026, retail performance will be increasingly achieved through integrated, full-funnel approaches, reflecting the broadening digital ecosystem where above-the-line campaigns create awareness and digital touchpoints convert interest into sales.
Email remains a powerful engine for direct conversion. The chief executive of one fashion retailer sees half a million clicks weekly from email, and PureSeoul has seen email-driven revenue grow over 40% thanks to a significant proportion of email sign-ups through store openings.
Social channels remain critical for retailers to ensure share-of-voice and cut-through in a crowded market. The Cotswold Company chief executive Ralph Tucker says as a smaller business is needed to be good across at least 20 marketing channels but adds that as the retailer’s customer is aged 45 plus and usually female, “Facebook’s still pretty huge and Instagram’s pretty big”. Though he also says that Pinterest performs particularly strongly, Cotswold is running “useful” tests on TikTok, and YouTube is also important.
Instagram is also a focus channel for PureSeoul. “Our Instagram-based Cloud Club – a 4,000-member, community-focused initiative featuring private, intimate events like our popular Run Club – is proving highly effective,” enthuses Tang. “With the fourth and fifth editions already planned, this approach is helping us boost customer lifetime value through deeper brand engagement and loyalty.”
Measuring the impact of all social media activity remains a challenge. As Asda’s Doyle says: “It’s always difficult to tell whether digital or above the line has driven the traffic. It’s that fine line, isn’t it? Earlier this year, when we launched Yasmin Le Bon as a face of George, we clearly saw very good conversion. We saw some pretty decent sales and most of that was above the line. But then obviously content also flows through to digital, to TikTok, to Instagram, you name it.”
Retail media and in-store technology are gaining popularity. Morrisons is experimenting with holographic displays and dedicated screen bays to engage shoppers directly at the shelf edge – an innovation that could see broader rollout in 2026 as retailers seek to merge digital and physical retail. “We are planning to have thousands of screens in the store as a dedicated base for some great brands,” explains Morrisons Baitiéh.
Morrisons uses tech solution Autogram for its Retail Media planning and execution “We need this facility to make sure the execution is perfect... and not only in store, but online,” he adds.
Moreover, loyalty programmes are gaining strategic importance. BP, Pets at Home and PureSeoul all highlight customer retention and basket size growth driven by personalised loyalty experiences – an area ripe for tech-enabled expansion.
The 2026 forecast suggests retail marketers will invest more in integrated campaigns that combine mass reach with personalisation. The use of econometric modelling, as practiced by Matalan, to optimise ROI across channels will become standard practice. As N Brown’s Steve Johnson puts it: “No single channel drives the best results – it’s how they work together.”
Share of voice: Getting the message out
One thing is clear, marketing strategies are evolving rapidly, with a sharp focus on effectiveness, measurement and integration. The business leaders we interviewed detail a wide array of marketing tactics being deployed.
While paid search (pay per click – PPC), email and social media continue to deliver strong ROI, the prevailing theme is that no single channel is king. As Antler’s Kirsty Glenne puts it “we are pretty obsessed with full funnel strategy”.
Throughout 2026, retail performance will be increasingly achieved through integrated, full-funnel approaches, reflecting the broadening digital ecosystem where above-the-line campaigns create awareness, and digital touchpoints convert interest into sales.
Email remains a powerful engine for direct conversion. The chief executive of one fashion retailer sees half a million clicks weekly from email, and PureSeoul has seen email-driven revenue grow over 40% thanks to a significant proportion of email sign-ups through store openings.
Social channels remain critical for retailers to ensure share-of-voice and cut-through in a crowded market. The Cotswold Company chief executive Ralph Tucker says as a smaller business is needed to be good across at least 20 marketing channels but adds that as the retailer’s customer is aged 45 plus and usually female, “Facebook’s still pretty huge and Instagram’s pretty big”. Though he also says that Pinterest performs particularly strongly, that Cotswold is running “useful” tests on TikTok, and that YouTube is also important.
Instagram is also a focus channel for PureSeoul. “Our Instagram-based Cloud Club – a 4,000-member, community-focused initiative featuring private, intimate events like our popular Run Club – is proving highly effective,” enthuses Tang. “With the fourth and fifth editions already planned, this approach is helping us boost customer lifetime value through deeper brand engagement and loyalty.”
Measuring the impact of all social media activity remains a challenge. As Asda’s Doyle says: “It’s always difficult to tell whether digital or above the line has driven the traffic. It’s that fine line, isn’t it? Earlier this year, when we launched Yasmin Le Bon as a face of George, we clearly saw very good conversion. We saw some pretty decent sales and most of that was above the line. But then obviously content also flows through to digital, to TikTok, to Instagram, you name it.”
Retail media and in-store technology are gaining popularity. Morrisons is experimenting with holographic displays and dedicated screen bays to engage shoppers directly at the shelf edge – an innovation that could see broader rollout in 2026 as retailers seek to merge digital and physical retail. “We are planning to have thousands of screens in the store as a dedicated base for some great brands,” explains Morrisons Baitiéh.
Morrisons uses tech solution Autogram for its Retail Media planning and execution “We need this facility to make sure the execution is perfect... and not only in store, but online,” he adds.
Moreover, loyalty programmes are gaining strategic importance. BP, Pets at Home and PureSeoul all highlight customer retention and basket size growth driven by personalised loyalty experiences – an area ripe for tech-enabled expansion.
The 2026 forecast suggests retail marketers will invest more in integrated campaigns that combine mass reach with personalisation. The use of econometric modelling, as practiced by Matalan, to optimise ROI across channels will become standard practice. As N Brown’s Steve Johnson puts it: “No single channel drives the best results – it’s how they work together.”
Cybersecurity takes centre stage
After a bruising couple of years marked by high-profile cyber-attacks on Marks & Spencer, Harrods and the Co-op, cybersecurity has shot to the top of the agenda for the UK retail sector.
These incidents, which exposed customer data and disrupted operations, have triggered a wave of introspection and action across boardrooms, with retail leaders determined to be better prepared for cyber threats.
Heading into 2026, UK retailers are intensifying their cybersecurity efforts, with a blend of technology upgrades, cultural shifts and cross-sector collaboration. While investment levels vary depending on the size and digital maturity of the business, most chief executives agree that cybersecurity is no longer a line item; it is a strategic imperative.
A major theme is company-wide awareness. Many executives stress that technology alone is not enough – human error remains the most common point of failure. Consequently, employee training has become a continuous effort, with phishing simulations, regular refreshers and even behavioural metrics tracking cyber hygiene. There is a clear recognition that vigilance must be maintained at all levels of the organisation.
Several retailers are also bolstering their technical defences through AI-powered threat-detection tools, regular penetration testing and tighter access controls. For some, cyber preparedness includes scenario planning and business continuity exercises designed to simulate worst-case events such as warehouse shutdowns or full ecommerce outages. Others are turning to external specialists to audit systems and manage risk proactively.
Notably, recent attacks have triggered a stronger appetite for industry collaboration. Retailers are beginning to share threat intelligence and best practices, acknowledging that the industry is a collective target. Some executives even call for more open cooperation between competitors to create sector-wide resilience.
For digitally native or fully online brands, the stakes are even higher. With no physical fallback, a cyber breach could mean complete operational paralysis. As a result, these companies are particularly focused on system monitoring and strengthening their defensive posture through stricter internal protocols.
Retailers that experienced attacks firsthand have doubled down on resilience, often tying cybersecurity directly to recovery planning and organisational performance metrics.
The message is clear: the reputational and financial consequences of inaction far outweigh the cost of prevention.
Click here for Chapter 3: Tech-driven, AI-enabled
