Study: Retailers are slowing down their expansion projects in response to global pressures

Global retailers are taking a more cautious approach to their growth strategies in the face of increasing economic and geopolitical pressures, according to a new study from the World Retail Congress (WRC), Incisiv, and Manhattan Associates.

The study, released at this year’s WRC edition that started yesterday in Berlin, Germany, and will continue until April 29, reveals that less than one in six industry leaders are currently pursuing aggressive expansion. The majority of them are now focusing on cost control, operational efficiency, and selective growth.

“The certainty has disappeared,” the report states, highlighting a major shift in priorities as the factors behind the current market volatility become permanent disruptors rather than temporary ones.

Among the surveyed senior executives, only 52% said they are proceeding with selective expansion, while 35% are in “fully defensive mode.” External pressures such as geopolitical instability and trade disruptions were cited by over three-quarters of respondents as key elements in shaping their strategy, while 72% noted that inflation and margin pressure were resulting in structural constraints.

In a statement, Ian McGarrigle, WRC President, said: “The retail operating environment has fundamentally changed. Geopolitical instability and inflationary pressures are now the norm, shaping the everyday reality of businesses across all markets. Retailers must rethink their growth approach, investments, and responsiveness.”

Investments are still happening, but companies are targeting them more, focusing mainly on customer experience and personalization (72%), AI and advanced technologies (58%), and supply chain capabilities (56%). However, seven out of ten leaders say they cannot move from decision to execution as quickly as their competitors, largely due to a persistent lag in implementation.

On the AI front, executives expressed both concerns and opportunities. A significant 98% fear that AI-driven research may diminish their brand visibility. “AI is beginning to act as an intermediary just before a consumer reaches a brand’s touchpoint,” the report notes, emphasizing the importance of product data, content quality, and digital presence.

AI implementation remains limited, despite strong confidence in the technology. While 91% of executives expect AI to be a “prerequisite by 2030,” only 29% have the necessary databases and technology. The report identifies this gap as one of the most significant risks.

In physical retail, roles are evolving. For 86% of leaders, stores remain essential for building customer relationships, with 81% considering them as the “pillar” of commerce in 2030. Stores themselves are transforming into hubs for order management, digital engagement, and brand experience.

Katie Foote, Senior Vice President and Marketing Director at Manhattan Associates, commented: “As customer expectations rise, personalization is no longer just an added bonus. Shoppers expect retailers to know them, anticipate their needs, and provide a seamless experience across all channels. This is only possible if retailers can apply AI to real-time data on stocks, orders, and execution.”

“Unified commerce is what brings these elements together, transforming AI from a promise into a connected experience that builds customer loyalty and drives profitable growth. This becomes even more important with current macroeconomic trends and the unstable global environment.”