Why Unlocking Volume Growth Is Retail's Defining Challenge

This article was originally published in the World Retail Congress 2025 end-of-year report.

For retail executives, one stark reality overshadows all others: the pursuit of like-for-like volume growth has become a matter of survival. Retailers face an existential crisis; relying on price increases to mask declining sales volumes is no longer sustainable. The economics of low-margin retail simply do not work without genuine volume growth. In a fiercely competitive environment, the need for volume and market share requires both innovative and disciplined approaches.

What is remarkable is the sheer amount of trading muscle some retailers have lost. The successive shocks of the pandemic, prolonged supply chain disruption, and the burden of inflation have left much of the industry weaker than ever. Consumer data paints a mixed picture, but the overarching trends are cautious spending, decreasing loyalty, and shifting priorities – pushing retailers to up their game and adapt both proposition and operating model as some of the old levers for growth no longer function. Many consumers are actively reducing food waste, while in other categories, they are buying less and prioritising pre-loved items – posing persistent challenges to volume growth for the foreseeable future.

This challenge is reinforced by a hostile external environment. Political instability and geopolitical tensions create unpredictable headwinds, while the economic outlook for at least the next few years is one of stagnation, dashing any hopes of a rising tide that will lift all boats. Retailers must now engineer growth against the macroeconomic current, not with it.

Meanwhile, consumer and regulatory demands for greater sustainability and responsibility are adding layers of cost and complexity. Labour rules, environmental reporting, and tax changes are making the hill retail must climb even steeper.

Technology – and AI in particular – continues to be hailed as a saviour, but it alone is no silver bullet. The hard truth is that for a business that has lost relevance or failed to master its fundamentals, technology will not get you out of jail. Many retailers have neither the digital infrastructure nor the trading discipline required to unlock its true value.

This creates a perfect storm, where growth must be fought for and seized from competitors, not simply expected. Against this backdrop, AlixPartners' forthcoming 2026 World Retail Congress report and podcast series will delve into the three strategic levers that retail leaders must pull to regain momentum and restore essential volume growth – and share insights from those who have succeeded.

1. Fix the fundamentals: Strengthen your core trading muscle

Foundations must be reset. Many retailers have lost discipline on the non-negotiables: the right product, price, place, etc. Some have fallen into bad habits, for example adding non-productive range in pursuit of elusive growth, damaging the customer experience and adding complexity and cost. Rebuilding trading muscle is not glamorous, but it underpins every other ambition – requiring disciplined value chain management, precise data-based decision-making, and an operational focus that makes every investment work harder. Fixing these fundamentals is the only way to create the operational and financial headroom needed to invest in the future.

2. Differentiate to drive demand: Take share with precision

With a stagnant market, growth depends on outmanoeuvring rivals and taking share. This demands absolute clarity on who you are competing against and what you stand for. Retailers must sharply define their proposition to remain relevant and rethink how they deploy creative tactics to attract and keep customers. It's about driving efficient footfall and conversion, not just relying on broad marketing or loyalty tactics. Every visit, whether physical or digital, must be optimised to count.

3. Make the big bets: Embrace inorganic growth

Finally, disruption brings rare opportunities for market-shaping moves. As distress ripples through the sector and consolidation reshapes the landscape, bold, proactive inorganic growth strategies are becoming essential. This isn't just about traditional M&A; it's about being more innovative and creative in capturing value. This could mean acquiring competitors to build scale, using special-purpose vehicles for targeted market entry, or leveraging restructuring tools to transform a business model for greater agility. Those who are prepared to make big bets will be positioned to redefine their market position,
unlocking scale, agility, and new value pools.

The defining challenge for retail now is finding a route back to sustainable volume growth. This requires a fundamental shift in mindset away from incremental tweaks and towards a true restructuring mentality. Retailers must act comprehensively, rebuilding basics, driving clear differentiation, and exploiting bold inorganic opportunities – all at once.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.