Using technology to minimise losses and drive efficiency in a challenging retail landscape.

Industry Insights / Using technology to minimise losses and drive efficiency in a challenging retail landscape.
As we move into 2025, UK retailers are facing exceptional challenges. Retailers must adapt by finding innovative ways to reduce costs, increase efficiency, and minimise avoidable losses. This is where technology and data-driven solutions step in, offering a pathway to transform inefficiencies into opportunities.

The combination of Rachel Reeves' budget announcement regarding Employer’s National Insurance Contributions (NICs) and the inevitable rise in the National Living Wage is putting staffing costs under intense pressure. Coupled with a cost-of-living crisis and shifting consumer behaviour, the need for efficient retail operations has never been more pressing.

In this articles we discuss some of the current challenges facing retailers, highlighting why rascals innovative solutions are ready to help retailers ease some of the seemingly ever-increasing load.

The challenge: Rising costs for retailers

For retailers, the burden of rising wages and taxes has become a central concern. With the National Living Wage increase set to take effect in April 2025, labour costs are poised to climb even higher. These changes come at a time when retailers are already grappling with tightening margins and the ongoing volatility of the UK economy. The British Retail Consortium recently reported that major retailers such as Tesco and M&S believe the industry faces a 7-billion-pound rise in annual costs. This is an outcome they warned current Chancellor Rachel Reeves of back in November following the budget announcement.

The glum outlook is compounded by 2024 Q4 retail data which suggests that growth stood at a mere 0.4% vs. the same period in 2023. With inflation for the period at 2.6% we can conclude that there was a reduction in the volume of goods purchased, with consumers acting in an understandably cautious way. This is backed up by reports of reduced footfall and the warning of reactionary price hikes.

The solution: Leveraging data to improve efficiency

There are solutions available. By adopting innovative technology to improve data sets and streamline operations, retailers can minimise waste in some of the trickier areas of the business. Whilst this cannot totally mitigate these mounting costs, there is the ability to provide some level of protection and support to margins.

At rascal systems, we specialise in helping retailers optimise their most complex categories, those that don’t neatly fit into business-as-usual trading and supply chain models. This includes areas like newspapers and magazines, cosmetics, apparel, books, greeting cards and local or direct suppliers. These categories often account for a disproportionate share of inefficiencies, resulting in higher shrink, risk, and labour costs.

Real results: Success stories with Sainsbury’s and Waitrose

The impact of our solutions speaks for itself:

Sainsbury’s achieved nearly £5 million in annual cost savings by implementing one of our solutions. Waitrose reduced over 50,000 hours of labour each year by streamlining its operations.

Retailers like WHSmith, Morrisons, Roadchef, and ASDA have similarly benefited from turning these challenging categories into areas of strength through our data and tech-driven approach.
Our solutions don’t just address day-to-day inefficiencies—they also help retailers think strategically.

As Andrew Wood, Buyer at Waitrose, says:

“rascal gets involved at a strategic level, supporting the longer-term strategy… They are very, very good at the day-to-day tactical, but they also see that longer-term bigger picture.”

Why act now?

The timing for change couldn’t be better. With economic and policy pressures driving the cost of doing business higher, the motivation to find solutions is at an all-time high. Optimising operational efficiencies was highlighted by Shopify’s Managing Director, Deann Evans, as one of her two priorities for retailers in 2025.

With the end of the financial year on the horizon, this is the perfect opportunity to review budgets and explore impactful investments.

At rascal systems, we partner with retailers to deliver tangible results. As Richard Tedder, Ranging Lead at Co-Op, explains:

“They are a full partner with us. If I was going to recommend them to another retailer I would say, you can trust them and they are like a colleague. You can see the benefit—it’s there in pounds and pence.”

Get in Touch

If you’re ready to tackle rising staffing costs, reduce shrink, and drive operational efficiency, now is the time to act. Let’s discuss how our solutions can help you make measurable savings and position your business for success in 2025 and beyond.

Reach out to us today to schedule a conversation and take the first step toward transforming your operations.


This article was written by our Commercial Director, Jonty Edwards. Get in touch with rascal or Jonty to discuss how we can help your retail business deliver efficiency across complex categories.


Sources:

https://www.reuters.com/markets/europe/uk-shop-prices-dropped-december-prices-likely-rise-2025-brc-says-2025-01-09

https://www.reuters.com/world/uk/uk-retail-warns-inflation-job-losses-budget-seeks-reeves-meeting-2024-11-19

https://www.ft.com/content/506d9be8-19e9-4c85-8436-cb3bc4891abc

https://www.thetimes.com/business-money/economics/article/retailers-warn-of-price-rises-and-closures-after-disastrous-christmas-trading-qqql3tknx

https://www.retail-week.com/retail-voice/how-retailers-can-succeed-in-2025/7047749.article