Future of Retail: Declining Footfalls and Retail's Blue Collar Outlook for 2040

Hi everyone, Brian Walker, CEO, founder of Retail Doctor Group. Um, thanks for joining us on May 2026, uh, where we do our future of retail podcast. And I'm delighted because in May 2022, you might recall, I had the great pleasure of interviewing and talking with um a gentleman named Howard Saunders, a friend, a colleague, and a remarkable retail futurist. And uh I thought on the anniversary we'd come back together. And in May 22, uh I can remember sitting here in Sydney and Howard was in London and we talked about the levers of retail. And I have to say if you go back to that period and you relisten to that podcast there is so much accuracy in those predictions. So without further ado, hope as we start to sort of uh really think about the future of retail, its relationship to the future of obviously consumerism, population, demographics, and we can't walk away from technology. And if you're a CEO or a res a retail board member listening to this podcast and listening to the strain and thinking around the future, there's some fascinating themes and one of them, of course, dare I say, is the growth of AI, but I really want to zero in on what that means. And you talk about the jobs apocalypse. I don't know if you've sort of if because everyone's debating this. Everyone's debating it and I have a slightly tempered view of it which is I see it as a sort of seessaw of change rather than this apocalyp apocalypse is you know is a nice word to grabs headlines and but the I think the truth will be a little bit more gradual but what we're seeing so my analogy is water you know I've got a glass of water here knowledge will be like water knowledge is free. Ask AI anything. I know it can be wrong some of the times. It often is and it exaggerates but knowledge on the whole is free. So if I say like how much is water Brian you free isn't it? Well it's not quite free is it? Because if it's just straight out the tap it's pretty much free. If however I chill it in a bottle and brand it then you know you can charge a quid for it and if I take you to if you're in a concert or whatever in an event and I can probably charge you three or four quid. Sorry to use quid but that's my link. — That's okay. — So it's not really free. It's how you package it. And that's what's going to happen to knowledge. Knowledge and information. It's on the whole free and then when you want it packaged and branded and reassured and reprocessed then you'll pay a little bit for it. So what we you're going to see is the lawyers take a big hit because we can ask all that upfront research stuff and finish the job off with the human touch and the human reassurance and the human negotiation. And you're going to see that tipping just tipping. knowledge becomes free. What happens to the economy? I mean, it's kind of incredible. So, all the people crudely all the people we see as those experts, they're going to become poorer. — And you look around you, — we'll get on to demographics later, I think. But you look around you. When you go to a nice smart restaurant, if you know the people, you'll notice there are it's builders and scaffolders and plumbers that are in there now. Those things that's changed. It's tipping. So that the muscular economy is taking over from the knowledge economy and it's slowly tipping that balance. So we're going to see, you know, a decline of the lanyard class as they call it, the admin, clerical, — legal research, big contracts and all that stuff. — Yeah. These are all roles that have always been data dependent roles essentially. — Yes. And what what's interesting here I think is that whilst AI how it may not yet be causing mass unemployment it's already shaping tasks or reshaping tasks and you've given those examples as it does uh it must by definition reshape productivity tax basis wage confidence

so what about is the deeper issue ultimately that it's not only about jobs lost It's what's going to happen to consumer demand when work, income, and identity are destabilized. — Yes, you get this seesaw tips and it changes the profile of the economy of the consumer class. But the biggest thing we I know we I'm desperate to talk about demographics and I don't want to get into it now, but that's the biggest thing that's going to change the uh the customer profile, but you know, let me just do a bit of good news. I do all these silly analogies. You know 100 years ago ask my grandfather actually come and get my grandfather land him in the pub after you know a busy working week and he's listening on what people are doing what their jobs are and he wouldn't understand any of them okay none of them not one would make sense to him really in you know in the center of London whether it's all people in — PR and agent promotion he wouldn't understand any of And but it's the same for me if I haven't said this before but whatever because it's the same for me if I go back to the local pub that right outside the agency I worked at in the 80s and I listen to what they're saying I don't really know what they're doing either. So the jobs formulate around the economy. So it's you can't just look through a toilet roll, you know, look think, oh, what's happening to this job? Well, if you do, yes, this job will evaporate, — but it's what accumulates in other areas. So I'm pretty positive on much of that, but the tipping point is this shift from the knowledge economy to the muscular economy, and that that's undisputable, I think. And that's a really nice terminology around moving from the knowledge economy to the muscular economy. As retailers think about distribution, modeling, segments, audiences, a range of topic, pricing and so forth, all comes ultimately from demand. And what does demand start to look like in Australia? By 2028, one in four Australians will be over 65. And you talk nicely, Howard, about the demographic time bomb. We face the same aging, low fertility, dependency ratio pressure as Europe, fewer workers to our earlier point, more retirees, rising health care costs, of course, labor shortage, and pressure on consumption growth. again. Well, it's obviously a retail and economic problem looming. What are your thoughts on the demographic time bomb? And I so I was looking at this in terms of Europe, the US, which are always the sort of benchmarks. And then because I knew we were going to have a chat, I had a quick look at what's happening in Australia. It's exactly the same, if not worse. — It's a sort of microcosm actually. Um, — but it's back to read the room. And the reason I say restaurants, because restaurants are good, because they're barometers of wealth, really, aren't they? There's what you do with your disposable income. So, look around the restaurant when you're next in. Look around. They're all old. They're all old people. — I mean, it might be different in certain areas. And I can hear someone scream. It's not true. I was at a restaurant like, "Shut up. " — Yeah. Oh, no. — That might — Yeah, that might be true of some of the more older burrows and cities. London's a standout example. Look, I do take the point. Well, of course, because we're aging uh at the rate which we've touched on, — as you say, read the room. So, — so yes, I think you're — seeing it. You know, it's not just theory. — Yeah, that's the point. my point, — but that it goes back. It's a very simple I heard I was listening to a podcast the other night — and something that I didn't wasn't hadn't really thought about because I'm not a mathematician. Look, the birth rate the fertility rates are in the UK it's 1. 4 in the in Australia it's about the same 1. 4 in the US is slightly better 1. 6. — But here's the thing I hadn't thought. So obviously you understand the fertility rate of two is a replacement. So fertility of two is just status quo. If everyone has two kids, there is no increase in the population. None. Yes. — Okay. So it's not good news. Two isn't good news. 1. 4 is disastrous news. So

let's just do the math. If it's one, if the replacement rate is one, it halves the population. and halves it again because the next 25 years the next generation it's h haveved again so I don't know what the reverse of hyperbolic is that curve that drops off a cliff a piano falling out that is where we are and this is really fundamental stuff and no one's really well are they some people are — but what that means is crudely looking at the looking at Australia specifically It roughly divides into thirds. You've got a third of people over 60. That means they're going to need health care and welfare and pensions and the rest of it. You've got a third of the population, which I say newcomers, people that weren't born in Australia, a third. Okay? And then you got the rest. and the rest some of them are working some aren't have got to pay for everyone else that that's where you go we're doing exactly the same here and it's just crudely it's not sustainable — it's you cannot pay for all those pensions at the and your pension system is actually different to ours — we've got — yeah we've got the superanuation plan and we do have — 15% or thereabouts directly self-funded retirees and so forth But there are those pockets of wealth. But I think you the really interesting topic as well of course is the birth rate. So here we are building all these retail channels and stores and all this sort of stuff. And I think what you're saying that in the future we'll have less not more inhabitants on this world — to partake. — Well, immigration is topping up the lack of — Yes, it is. But that's a massive shift and we can talk about that as a massive shift. — But that's a relatively shortterm shift, isn't it? Because if overall populations to your map and so forth are declining, well the pessimistic view would be we're sh we're just shuffling the debt chairs from country to country. — Yeah. optimistic view after 2050 2060 some people put it out the global population starts to follow the same trajectory so that's long term which is great for climate change and all the rest of you know people stay positive the big thing you because we're here talking about retail and when I talk to retailers I you know they they're fully prepared for climate change there's not a retailer out there that hasn't got something in their annual report reacting to climate change and yet sustainable and all that which is yet to happen I'm afraid yet to happen but we're all prepared for it the demographic shift no one's mentioning — but the two things it does is one it reduces your number of customers massively because who are customers They're people in their 20s and 30s and early 40s. People like you and me, Brian. We're not buying fridges and carpets and clothes and shoes and t-shirts and sneakers. We're not buy — I still buy a few hard but I take the point. — I wasn't including you. Sorry. Um but we're just not we're not the big consumers — and the millennials. Absolutely. — Customers. So this is the bit that no one's talking about. I add on to this process. It's the lack of customers in the equation and that no one's really thinking about 2040 in 14 years time 37% of your population won't have been born yet there. — So what does that mean? Who is it that writes the comedy, the films? Yeah. What sort of restaurants do you have? What about your clothing stores? Who are you catering for in that? You got this boomer generation which is getting older and sicker, disappearing off. — Yeah. — Australia changes. — It's, you know, I'm not putting judgment on. It's just changed. And so the Australia we knew — and know and love is gone. It lasted a hundred years. That's the truth. The same is happening across Europe. That shift of who we are, those are the things that people, you know, where where's the culture sit in that equation. So

— well, yes, — tricky conversation. — Oh, it's fascinating. I'd like to think there'll be an emergence of a particular culture. Um, but I want to take your point about less consumers, less customers. — To me, that's the really fascinating piece around. So, what does retail look like if there's less customers? If AI permeates the economy to the level that we think it will. So the knowledge worker is redeployed. One would hope. The muscular economy has more sort of uh impact into this sector. — Yeah. — But there's just less people because we're having less babies. — That's true. We could turn it around. We just need to have a lot of babies. And there's lots of evidence that you can't turn that around, which sad actually. — That's the cure for this. We're talking across the board here, but what happens is you get the migration into cities. So cities will always that's where the young people go. So of your third of the work, it's not the workforce, third of the population that can work, some of whom won't because well for various reasons, — they'll be funding the whole of Australia. They'll migrate to cities and what happens is the towns then struggle. So, and we're seeing it already in the UK. You go to towns, they're sort of full of old people. — I'm in one. I'm in one here. Okay. I'm not in London at the moment. I'm in one. It's full of old people. You lose the banks. You lose the restaurants. You lose the fire station, the police station, and slowly you get these dying towns. The cities, you know, land in the center of London is still thriving. That will be the — thriving and vibrant. Yeah. So, but your towns, your suburban towns will be where the suff where where the pain is. Um, and that's where the retail will contract massively. What's the point of having shops on the high street if there's no customers out there? This is 2040 and we've already just said that you know last time we spoke which seems like last Wednesday was actually four years we're talking that's right — 14 years and this is happening. So what retailers do you know have got a plan of action for redistributing their you know their branches and their outlets and rethinking their demographics and their customers — and who their audiences are and so forth. — Who is that? — I think that I think that's the value proposition for sure. But, you know, I also look at a couple of other aspects that you touch on. Uh, and I see here that in the average Australian diet coming now and into the future, um, about 50% of it's made up of re-engineered ultrarocessed foods. And, you know, and I just think to myself, okay, we're aging at a rate of knots. Uh, it'll we'll be dominated by aging population over the next 10-15 years. will absolutely have the impact of AI and then we're going to feed everyone or 50% of the population very crudely ultrarocessed foods and then pump them full of medicines to keep them alive a bit longer. — So it's all sounding a little bit pessimistic. I need some you're ahead of me. Um there is let me do some hope on the horizon. Um, we've got this, let me do a shout out for this guy that's actually a local guy here. I've never met him, but he's guy called Rambling Henry, and I don't know why I'm helping promote him. He's on TikTok, and he just says, "For Christ, why are we eating all this crap in the supermarkets, seed oils, E numbers, and all the rest of it? " and he's very good at explaining sort of the mess that we've got ourselves into. Um, but essentially I don't think it's a wicked plan. I mean, there are some tin foil hat people out there who sort of think it is. They want to sell you the cure because they make you ill and then they I don't think they're as clever as that. I think for pressure on the supermarkets to cut costs, we've in a period of less than 20 years, we've suddenly seen everything has got rape seed oil in it. And there's loads of evidence to suggest it's inflammatory and all the rest of it. And you've already you're ahead of me on this. Yeah, they're poisoning us. Okay, they're poisoning us. This is the theory. They're poisoning us and there's no other choice. However, and you know, go around the supermarket, have a look, but cuz I do I've now sort

of become obsessed with this bread. Do you know what bread should be? It should be flour, water, and yeast. Maybe a bit of salt. That's I made butter this week. I've never done anything like this in my life. Do you know what butter is? Do you know how you make butter? This is the easiest thing in the I know. — Brian, how old are you? — Oh, look, I'm Well, I'm proud to say I'm in my early 60s these days. Well, I'm ahead of you a little bit, but do you know what? I'm the same as you and I've never I don't know how you make butter. Do you know how to make butter? You churn cream. You churn it and churn. It's the simple. Eventually, it just turns into butter. You empty out the buttermilk — and do it in cold water. It's brilliant. So, I made butter this. But you look at butter in the supermarket, it's got rape seed oil in it to help make it spreadable. You look at bread, it's got rape seed on it. Palm oil in it. Canola, it's the same thing as rape. They have taken away the dairy product and replaced it. Chocolate has become is full of seed oils. So there's an opportunity in all this because where is this? Let me start with this. Where's all this come from? How do we suddenly know this? Well, it wasn't the NHS texting me, was it? It wasn't governments doing documentaries on it. It wasn't there wasn't the BBC doing this imp impactful journalistic analysis of what's happening. No, no. It was Tik Tok, wasn't it? That's the truth. And we've now social media, I'm picking on Tik Tok, but social media has taught us in terms of health, the NHS who take maybe a third of everything I've ever owned, earned have never written to me and said, "You know what? You should do this. Eat more of this. " Never. Not once. They've never said anything. If I go to my doctor and say, "Look, I've got this pain in my leg and I don't wish I did this week. " But um he's not going to say, "Well, do you know you should look at your diet because he's" He's not going to give me any advice. He doesn't know anything about me. He's got he pulls up the file. He's got three things written down there, isn't it? About an operation I had six years ago. Got nothing on me at all. — Yeah. Social media knows exactly what's happening. AI get into that world will know exactly what I've eaten, where I'm buying food, what I'm doing. The advice coming down the line is forensic and it changes everything. So, here's the good news cuz we're so it's bubbling underneath. It's bubbling up. We can feel it. I test it. I talk to people in the pub, talk to people out and about. Well, yeah, I have heard about these seed oils. Yeah, I don't know what to do about No, it's bubbling up. The the great opportunity is for one of the supermarkets. You have a different situation there, but we have sort of four biggies — to become a champion of that and to offer us. But at first it'll be just an aisle, an aisle that's seed oil free and it will expand and grow. And Marks and Spencers over here are prime for that. They're full of seagulls at the moment. They're starting to introduce products right now. Don't know why I'm promoting them, but starting to produce products which are simpler. And the ingredients are on the front, not on the back, not small ingredients. They don't know yet. They don't know. that they could be the big champions and inherit that market because the chances are when I get my arm I wave my arm in there I go is what's the chance we're going to become more aware of all this are we get more hyperchondriac can I say the word what's the chances or less are we going to go oh no do you know what I'll just go with the flow no no we're going to become more and more aware and that opportunity for that champion to take us into the future with food is enormous — and so you know how fascinating and I listen you I think to myself as we start to wrap this particular session up unfortunately I think to myself the conscientious objector will we see the rise of the conscientious objector not just in food but against uh having every single piece of their life examined analyzed and available in all forms of data. Um will there be a conscientious rise for rampant consumerism you know that influences us? How will society respond to these trends is probably the bigger question — or as big a question. — It's a great question to end on Brian. This is like but — it's your tiny little question isn't it? I would say to that tiny little question I think dare I mention co but

postco we are more cynical. We've woken up to the fact that maybe some a big farmer big food big agra big journalism big media may not always have our best interests at heart. So yes, the rise of the contrarians is hey there's a podcast. — Well, how delightful session and I am reminded a little bit about that series seven up. Do you remember Seven Up when they interviewed these children seven and 14 started about my age or our age? — Well, that's right. They took them through to relative to our ages and uh and they'd come back and they'd say, "Look, you know, effectively did what you have to say and your views and what had influenced you. " Well, I'm delighted to say, Howard, your views have progressed. They still remain cautiously optimistic and fascinating and of course insightful. I enjoy our bit here. uh and we'll get a copy of this and want to thank everyone who's listened in to our podcast, the future of retail. Uh again, stay tuned. We've got more coming. Fascinating session. Howard, thank you on behalf of Retail Doctor Group, our communities. Thank you. — Thank you, Brian. Thank you. Speak to you in four years time. No, — I'll make sure it's well before that.