Cost Mitigation 2025: A Retail Veteran’s Guide to Cutting Costs and Driving Growth

With over 30 years of experience as Retailer who has worked internationally, I’ve seen the retail sector navigate countless challenges—recessions, technological disruptions, cultural differences and shifting consumer behaviours. But the current economic climate, shaped by the 2024 UK budget, presents one of the toughest tests yet. Rising business rates, increased labour costs and inflationary pressures are squeezing margins like never before. Yet, in every crisis lies opportunity. The key to survival and growth is acting decisively to cut inefficiencies and reinvest in strategies that drive sales and cash profit. 

But how to determine the most productive path to tread? The risks are out there not least in the lens of subjectivity viewed by every Owner and Team member invested in their business, limiting their view of what’s possible and slowing speed of execution. Cutting the right cost and reinvesting it for growth is the toughest of decisions and needs an “outside in” set of insights. 

Let me share three hard-earned lessons to show how retailers can thrive in this environment, with such “outside in” help.

1. Cut Inefficiencies: Lessons from the Past

Early in my career, I worked for a mid-sized supplier to the DIY chains struggling with bloated inventory costs. Despite having a strong product range it had a significant tail of slow movers leading to dead stock and cash flow issues. We made a conscious effort to pause and think differently about our problem not sustaining it through a nose to the grindstone approach locking up our creativity. We needed to release our creativity so we took an “outside in” view. Using the right principles to sustain growth we trimmed the tail with creative supply chain modifications like just-in-time and renegotiated supplier terms. The result? A 20% reduction in inventory holding costs, improved cashflow and a healthier balance sheet. Today, inefficiencies like these are even more costly and hiding in plain sight, perhaps an “outside in” view may help unlock your business’ potential?

2. Drive Sales with Targeted Promotions: Impulse Zone Know How

In the early 2000s, I was part of a team that turned around a struggling High Street retailer in part by rethinking their front of store promotional strategy. Our data stood out in terms of footfall and the question was how to convert this into a higher ATV. Added to campaign blanket discounts we introduced targeted, data-driven promotions with a weekly and monthly cadence. In-store, we positioned impulse buys at the front of the store, supported by a clear call to action and eye-catching displays. We set conversion as the lead factor to measure success rather than simply sales performance. The result was a 15% increase in sales and a 10% boost in margins.

This approach is even more relevant today as a means of mitigating rising costs and its more likely hidden by the normal sales dashboard. An “outside in” approach may reveal the opportunity.

3. Speeding Up the Customer Journey : A Lesson in Conversion

One of the most transformative projects in my career was overhauling the customer experience for a Bathroom retailer. We mapped the customer’s journey along its timeline and forced ourselves to link up existing tech resources to drastically reduce it through innovating a unique customer experience, at speed. One that visualised the bathroom the customer was dreaming of and provided the actionable data the sales team needed to close the sale in record time. These changes not only improved customer satisfaction but significantly increased our conversion rate to beat our sales budget and push out our sales horizon beyond what we expected.

Sometimes an “outside in” view can find that innovation, stretch the sales horizon and drive cash much faster than sustaining the status quo.

If these hard-earned lessons trigger your curiosity then feel free to message me direct, charles@daleyhub.com

Charles P, Head of Retail