UK retailers are preparing for a significant transformation as artificial intelligence (AI) is projected to automate around 60% of retail tasks by 2035.
The latest report from Eversheds Sutherland and Retail Economics shows that businesses are allocating roughly 30% of their digital budgets to AI technologies, with more than two-thirds planning to increase investment in the coming two years.
AI adoption varies across retail functions
Digital and technology operations are expected to see the fastest AI adoption, with nearly three quarters of tasks in IT, online, and digital teams capable of being automated or supported by AI.
Supply chain functions, including merchandising, inventory management, and sourcing, are also set to benefit from AI, particularly through predictive analytics, workflow automation, and conversational tools that reduce manual administrative work.
Store-level operations, which employ over half of the UK retail workforce, are projected to change substantially. AI applications such as smart stockroom management, shelf analytics, and real-time customer insights are set to improve operational efficiency.
Leadership roles show slower adoption, with just over a third of tasks likely to be AI-enabled, though decision-making and forecasting functions are expected to gain from AI assistance.
Productivity gains and workforce transformation
The report forecasts productivity growth as AI becomes more widely adopted. Sales per employee are expected to grow by 4.9% annually in the early adoption phase (2025–2030), rising to 6.4% between 2030 and 2035 as AI systems mature.
Improvements are anticipated in demand forecasting, inventory control, and administrative efficiency, allowing employees to focus on more analytical and customer-focused tasks.
Challenges to widespread AI integration
Despite positive expectations, retailers face obstacles including legacy systems, integration costs, data quality issues, and skills shortages, particularly among mid-sized and smaller businesses.
Addressing these challenges is essential to fully realise AI’s potential and sustain workforce transformation.
The UK continues to lead globally in optimism toward AI in retail, with 94% of leaders agreeing that AI enables more meaningful and value-added work. Upskilling employees remains a priority as AI reshapes roles across the sector.
