Three-fifths of tasks carried out by workers across UK retail could be transformed by 2035, as retailers channel almost a third of their digital budgets into artificial intelligence, according to new research from law firm Eversheds Sutherland and Retail Economics.
The Retail Workforce Reimagined report forecasts rapid AI-led change across the sector over the next decade, with 76 per cent of retailers planning to increase investment in the technology within two years as use cases scale.
UK retail is positioned among the most advanced global markets in AI adoption, but the research warns that progress is increasingly vulnerable to longstanding operational barriers.
Digital operations to see fastest transformation
Digital and technology functions, such as online, digital and IT teams, are expected to undergo the most significant shift, with nearly three-quarters of tasks capable of being enabled by AI within 10 years. These teams benefit from strong data access and technical literacy, enabling quick deployment of machine learning tools, anomaly detection, software automation and cybersecurity applications.
Supply teams – including merchandising, inventory and sourcing – will see similar levels of transformation as predictive analytics, workflow automation and conversational assistants take on administrative and reporting tasks.
Store operations, which account for more than half of all UK retail employment, are forecast to see AI influence nearly 60 per cent of tasks by 2035. Technologies such as smart shelf analytics, automated stockroom management and real-time customer insight tools will streamline routine work, freeing store colleagues to spend more time on service and engagement.
Leadership roles are expected to see the slowest shift, with just over a third of tasks suitable for AI automation or augmentation over the next decade due to their reliance on judgement, persuasion and strategic decision-making.
Productivity boost for retailers
The modelling suggests AI adoption could deliver substantial productivity gains, with sales per employee projected to increase 4.9 per cent a year between 2025 and 2030, rising to 6.4 per cent annually once AI becomes embedded across retail operations.
These gains stem from better demand forecasting, tighter inventory control, reduced manual admin and enhanced decision-making across the value chain.
Notably, UK retail leaders showed the highest confidence in AI’s benefits across the five markets surveyed, with a 94 per cent net balance agreeing the technology will enable more meaningful, value-adding work. Many are already investing in upskilling to support the transition to more analytical and customer-focused roles.
Legacy systems still a major drag
Despite the strong investment outlook, half of retailers say legacy systems remain a major barrier to progress, driving up integration costs and slowing deployment. Data quality issues and shortages in AI-related capabilities – particularly in data engineering and governance – are also restricting the pace of change, especially for mid-sized and smaller retailers lacking the scale to modernise quickly.
Andrew Todd, partner and Retail & Wholesale subsector lead at Eversheds Sutherland, said AI could fundamentally reshape how retail operates.
“As AI increasingly handles routine and data-driven tasks, employees will be more able to focus on strategy, creativity, judgement and customer engagement,” he noted. “This will make retail operate in a more meaningful and customer-centric way, boosting efficiency and productivity. Ultimately delivering value to the consumer.”
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Highlighting the need for continuous upskilling and agile workforce models, he urged retailers to approach AI adoption with “thoughtful workforce design, robust legal governance and an adaptable focus on training.”
Richard Lim, CEO of Retail Economics, added: “UK retailers are accelerating their investment in AI. Disruption will happen in waves as retailers test, learn and iterative generative and agentic AI technologies. But without tackling legacy systems and closing critical skills gaps, retailers will struggle to unlock the full gains AI offers.”
The study draws on surveys of 250 UK retailers with revenues over £10 million, alongside economic modelling and comparative insights from France, Germany, the UAE and the US.