Consumer Industries Outlook for 2024

With the ongoing burden of a cost of living crisis, 2023 has been a somewhat turbulent and challenging year for the consumer industries. From food and drink, to travel and hospitality, to health and wellness, our team of experts have taken a look ahead to 2024 and made their predictions on what might be in store across this sector next year.

Clotilde Gros: “The cost of living crisis has continued to squeeze household budgets. Prices for essentials like food and energy put further pressure on discretionary disposable income. As we head towards Christmas and into 2024, the wider consumer industry is remaining cautious.

“According to Global Data figures, the UK retail market grew 4.3% to £387.5bn in 2023, however growth will slow in 2024 as consumers are expected to remain cautious with their spending. Weaker consumer demand and rising costs have impacted margins and wider financial performance and we are expecting some businesses to feel the pain into 2024, with perhaps more insolvencies and profit warnings into the first half of 2024.  Recent data suggest a fall in inflation throughout 2024, which will help with case volumes, although they are not expected to return to growth until 2025.

“During what looks like another year of turbulence for the sector, it will be important for retail businesses to continue to innovate, finding ways to create efficiencies and leverage new technologies such as artificial intelligence. Most importantly, the focus in 2024 needs to be on the all-important customer journey, ensuring all touch points are covered to drive that all important sale.”

Jo Kent on Food & Drink: “As rising prices and bills continue to put pressure on our purse strings, value is going to remain the big focus for food and drink shoppers in 2024. Savvy shoppers will increasingly seek out the best buys by keeping a keen eye on promotions across bricks and mortar and e-commerce retailers to help make their household budget stretch that little bit further. While many shoppers will be simply looking for the lowest out of pocket spend, some shoppers will be looking for value that goes beyond price. As the spotlight on sustainability and health continues to grow brighter, we’ll see some shoppers willing to pay a premium for brands that can effectively cater for these tastes.”

Ian Morris on Travel: “2023 was a strong year for travel operators with elevated rates for hotels and flights fed by consumers’ insatiable demand for travel. 2024 could present more challenges. The recovery is showing signs of slowing. Airlines will continue to struggle with staffing issues that have caused big spikes in delays and cancellations. Holiday rental providers are facing increased rules and restrictions from cities around the world. And travel providers will have to cater for increased reporting requirements facing corporates around their carbon footprints, of which business travel is not an insignificant constituent. But whatever bumps in the road, consumers are still expected to prioritise travel in their discretionary spend; and the long-term growth of the travelling middle classes in huge markets like India and China will see the global travel industry continue to thrive.”

Beth Colmer on Health & Wellness: “As we continue to take advantage of hybrid working and resist going back to the office full time, it’s predicted we’ll get fed up with stiff hips and back pain and start recognising the effects of poor posture on our ability to move well. 34% of Fiit members are tackling mobility sequences and online workout platform Les Mills+ has seen a 55% increase in mobility sessions. 

“Retail-gym-stores will continue to rise with the success of Gymshark on Regents Street staffed by a team of coaches ready to put customers through their paces. 

“No and low-alcohol will continue to boom, and we’ll see non-drinkers sipping on zero-proof spirits delivering a better-for-you buzz packed with nootropics and adaptogens.

“And in terms of skincare, faces are ‘out’ and bodies are ‘in’ according to the 2024 Pinterest Predicts Report which says that searches for ‘body skincare routines’ are up by a whopping 1,025%.”

Fi Todd on Hospitality: “As the demand for more personalised guest experiences continues to rise, it’s highly likely that improved personalisation will be a key focus area for the hospitality industry in 2024. Many businesses in the sector have been using data analytics and AI to provide tailored recommendations and customised experiences for a long time now, but the industry is currently under pressure to find new ways to take personalisation to the next level. Whether it’s providing menus tailored to dietary preferences or personal tastes, or recommending local activities and attractions to hotel guests based on their interests, those who prioritise offering specific, tailored experiences to each customer will be the ones to succeed in 2024.”

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