UK retailers face ROI & legacy barriers to digital change
Tue, 2nd Jun 2026 (Today)
PMC and Retail Economics have found that return on investment and economic uncertainty are the main barriers to digital transformation for UK retailers. The findings are based on research involving more than 100 senior retail and brand leaders.
The study found that 35% of respondents cited return on investment as a key challenge, while the same share pointed to wider economic uncertainty. The figures suggest retailers are trying to balance investment in new systems with pressure to protect margins as consumer demand weakens and operating costs rise.
Other obstacles lie within retailers' own organisations and technology estates. A third of those surveyed said legacy systems were holding back progress, while 24% identified internal silos as a barrier to change.
Leadership and culture also emerged as recurring issues. Almost a quarter of respondents said a lack of leadership support or strategic vision was preventing investment in digital transformation.
Richard Lowe, Chief Executive Officer of PMC, said the pressure on retailers has not removed the need to keep investing in change.
"Despite a challenging economic reality, retailers can't afford to take their foot off the innovation accelerator," Lowe said.
"And that means cutting their digital transformation cloth a little differently."
The findings point to a sector facing several competing demands at once. Retailers must update systems and improve operations while managing weaker consumer demand, more cautious spending and higher costs, including changes affecting employers and property bills.
System barriers
The report suggests ageing technology remains a central issue for many businesses. Older systems can make it harder to connect data across sales channels, stores and back-office functions. Siloed teams can also slow decision-making and make large projects harder to deliver.
Richard Lim, Chief Executive Officer of Retail Economics, said retailers are being forced to weigh innovation spending against immediate financial pressures.
"Retailers face a trade-off between the need to invest in innovation and other, often competing, business needs around cost saving and margin protection," Lim said.
He said that pressure requires retailers to focus on their digital foundations and tackle fragmented legacy systems before attempting broader transformation programmes.
Culture challenge
The research also highlights that digital transformation is as much a management issue as a technology one. When executive teams do not back investment or set a clear direction, projects can stall even when businesses recognise the need to modernise.
That finding is likely to resonate across the retail sector, where many companies have spent heavily on eCommerce, fulfilment and customer data in recent years but still face questions over how quickly those investments produce measurable returns.
For suppliers and advisers to the sector, the emphasis on return on investment may shape how technology projects are designed and approved. Retailers under pressure are likely to favour smaller, clearer programmes that show financial results sooner, rather than large-scale overhauls with longer payback periods.
Lowe said a simpler approach could help retailers manage those pressures.
"A back-to-basics approach - adopting simplified, product-led delivery models - will enable retailers to drive results from their tech stacks without tying themselves in knots," he said.
He added that the basics of integration and system design remain critical to reducing complexity and improving results.
"Getting the fundamentals right is mission critical," Lowe said. "In our work with leading brands, we see that retailers that embrace best-of-breed, modular approaches - underpinned by simple but unified data integrations - cut the cost of complexity while driving tangible performance."