Retailers are planning a sharp increase in spending on artificial intelligence over the next five years, betting that the technology will drive productivity gains, reshape workforces, and sustain the rapid growth of online sales seen this Christmas.
According to new research from the law firm Eversheds Sutherland, conducted with Retail Economics, almost three-quarters of UK retailers plan to increase AI investment between now and 2030, with more than half expecting the technology to generate a return within two years. The findings come as online Christmas sales are forecast to reach a record £26.9bn this year, underscoring the growing importance of digital channels.
AI adoption has already accelerated across e-commerce, customer experience, and operational functions, contributing to higher sales per employee. The report estimates that productivity growth linked to AI will rise from about 4–6% a year in the early stages of adoption to between 6–9% a year once systems mature in the next decade.
Larger retailers are leading the push. Companies with annual turnover above £500m, alongside medium-sized groups with revenues of £100m–£500m, are investing most heavily, reflecting both their greater resources and the scale of change required to modernise legacy technology and retrain staff. Online-only and hybrid retailers are allocating AI budgets up to 50% higher than those of predominantly store-based operators.
Digital and Technology Operations are expected to achieve the deepest levels of AI integration by 2035, while support, supply chain, and marketing functions are forecast to see increasing use of intelligent tools to improve forecasting, decision-making, and customer engagement.
Despite concerns about automation, retail executives remain broadly optimistic about the impact on jobs. More than four in five leaders say AI will make roles more customer-focused, shifting employees towards tasks that rely on judgement, empathy, and human interaction. In the UK, 94% of respondents said AI enables more meaningful and value-added work, one of the highest levels among the countries surveyed.
The report also highlights obstacles to wider adoption, including system integration challenges, cited by 42% of retailers, data privacy concerns, and persistent skills shortages. Addressing these issues will require sustained investment in training, job redesign, and governance, particularly as AI tools become more embedded in daily decision-making.
“The future of retail is a collaboration between people and AI systems, and it is already taking shape,” said Catherine Detalle, Partner and Consumer Sector Lead at Eversheds Sutherland. She added that retailers that invest in skills, ethical frameworks, and alignment between technology and strategy would be best placed to compete.
The research draws on surveys of 250 retail businesses conducted in Q3 2025, alongside economic modelling across five countries, including the UK, the US, France, Germany, and the United Arab Emirates.
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