New research from ESW and Retail Economics reveals that 76% of UK exporters are now actively diversifying beyond the US, historically the UK’s largest non-EU retail market. Larger UK retailers are radically re-drawing their global growth playbooks as protectionist trade policies upend decades-old export patterns. However, 71% of small UK retailers admit they have no formal plan for sudden trade-policy shocks, a stark operational gap that could hit margins overnight.
The report, “Rethinking Reach: How UK Retailers Are Turning Trade Pressure into Global Advantage,” highlights the factors driving the urgency of this pivotal moment for British retail. The US’s new baseline 10% tariff in 2025 is set to increase average duties on UK non-food exports from 2.3% to 17.2%, forcing retailers to reevaluate long-held assumptions about US viability. More than half of UK exporters would find trade to the US commercially unviable if tariffs exceed 22%.
“UK retailers are undergoing a seismic shift in their export strategies,” said Jon Sheard, VP of Northern Europe at ESW. “Retailers can no longer be overly reliant on a single trade corridor and are pivoting to new regions, including the Middle East and Asia-Pacific, where we are seeing exponential growth.”
According to the report, exports to the Middle East and North Africa surged 34% between 2021 and 2024, with the UAE now the fastest-growing UK export market outside the EU. Other growth regions include Non-EU Western Europe (+15%) and Asia-Pacific (+6%).
“Tariff volatility is reshaping the global retail landscape,” said Richard Lim, CEO of Retail Economics. “Retailers can no longer rely solely on traditional export markets like the US. Instead, they’re evaluating new trade routes and pivoting toward high-growth regions to diversify risk and capture new demand. Now is the time for exporters to plan and act. Future success will depend on the ability to adapt, localise, and seize emerging trade opportunities.”
The report also finds:
- 77% of retailers view global brand-building as a strategic imperative.
- Two-thirds are willing to sacrifice profit margin for export growth.
- The biggest barriers to international expansion include logistics costs, operational complexity, and regulatory uncertainty.
- UK retailers retain a distinctive advantage, with 40% of respondents noting that the “Made in UK” label delivers a premium perception overseas due to the country’s elevated safety and regulatory standards.
- Many retailers are increasingly turning to strategic partners that offer fast turnkey market entry to help mitigate the challenges new market expansion presents. This can include services such as handling payments, taxes, and logistics; local cultural positioning and trust-building; targeted demand generation and localisation; and expertise in warehousing, shipping, and customs.
Methodology
Research was undertaken by Retail Economics in Q2 2025. This includes surveys of 200 businesses across UK non-food retail, focused on exporters, and economic modelling – drawing on annual national statistics and proprietary data to classify trade flows by retail category, region and country.
Download the full report here.
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