Uncertainty prevails this month with increased geopolitical tensions and ongoing concerns over softening demand and a more cautious consumer. 

Whether businesses export or not, the interconnectivity of international supply chains means that the ripple effect of tariff tensions are still being felt. 

A member working in the advertising sector reported: “Our clients in the main are large, worldwide organisations who are impacted by tariffs. When clients are faced with higher costs, they tend to reduce their marketing or advertising budgets first.”

For one retailer based in London, international tensions are resulting in a need to rethink established supply chains: “Half of our business is in the US, and we supply from China. We’re now moving out of China as a result.” 

Others in the sector are yet to act but recognise the challenge: “A large amount of our apparel is made in Bangladesh and Vietnam. We’re trying not to knee-jerk but instead be measured in our response.”

Outlook for the high street

Closer to home, at High Street 2030, an in-person event held at Chartered Accountants’ Hall on 5 June, we asked a panel of experts: what does the future hold in store?

We all have a connection to our high streets and a vested interest in seeing them prevail and prosper. This event brought together members working in retail, hospitality and real estate, and aimed to recognise the changing face and now mixed-use nature of what was once the traditional shopping place.

“Although the rise in employers’ national insurance and the national minimum wage have totally gone against supporting the high street,” a practice member who advises retailers noted, the conference presented a generally positive outlook for the future, where technology will play a key role in a seamless integration of living, shopping and entertainment. 

While growth in online retail is often cited as a contributing factor to the decline of physical stores, views emanating from the room presented a very different picture. 

“Big retailers are investing back into the high street through a combination of upgrading existing and opening new stores. This supports the ability to touch, feel and experience products which is what consumers want,” was a view expressed from the North West. 

Others highlighted expansion on the high street as a tactical decision to build brand awareness, with a London-based retailer describing the presence of a central London store as “accelerating online sales”.

A physical presence was noted as an essential element for international expansion, and a key component of any marketing campaign. “As a mature business, a store presence in the UK would be cost additive. That said, it’s extremely valuable in the growth stage and something we will adopt as part of our strategy as we expand in the US,” said a retailer that up until now has predominantly operated online.

Innovation is key with concept or pop-up stores highlighted as a vehicle allowing retailers to demonstrate products to consumers who then go home and buy online.

Despite the positive sentiment, concern was raised for smaller regional centres. “Stores only work in big central cities like London – everywhere else gets left behind. You end up with a two-tier system – it’s a them-and-us situation,” said one member.

“Parking charges in regional towns drive people to retail outlets. What remains are hairdressers and nail bars, which require a physical presence,” another commented.

Whether high street units stay occupied and with what remains a commercial decision. As a real estate specialist cautioned: “The cost of changing empty retail space to alternative use is fairly consistent across the UK, but rents are not. Costs are not linked to any potential revenue opportunity.” 

Despite the positive sentiment shared at the event, this week evidence of a more cautious consumer saw the latest ONS retail sales figure drop by 2.7% in May, marking the largest decline since December 2023.

Cyber security concerns

Continuing with a retail theme, members turned their attention to cyber security threats driven by recent high-profile and well-publicised attacks: 

“A positive is that it happened to a large retailer that is big enough to survive. It showed everyone the importance of protecting themselves and the need to enforce company-wide training and testing,” said one member.

Although businesses increasingly recognise cyber security and ransomware risks, they can be slow to act. One member based in the South West commented: “It’s stuck on board agendas with no agreement on the investment required. With many businesses struggling to stay afloat, this is seen as an additional expense they can’t afford.”

Another member highlighted the increasing prevalence of cyber risks: “We get attacks every time we do a sale and try to batten down the hatches the best we can with business continuity planning. We’re not looking forward to the impact on insurance premiums.”

A member based in the North West advised: “Responsibility can’t just sit with IT – cyber security needs a business-wide approach.”

Scale-Up Live 2025

Scale-Up Live 2025 takes place on 1 July at Chartered Accountants’ Hall. This in-person event will include a panel discussion highlighting key takeaways from ICAEW’s scale-up webinar series and a fireside chat with Julie Deane CBE, founder of Cambridge Satchel. Places are being taken fast, so please book early to avoid disappointment. 

Meanwhile, the ICAEW Annual Conference 2025 will this year take place on 17 October in central London. This year’s theme is ‘Thriving in Transformation’ and promises to be even bigger and better than last year’s sold-out event. 

As always, we are extremely grateful to our volunteer network of committees, communities and ICAEW regional teams who provide feedback and gather insights.