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The Human Factor in Retail: Insights from the 2025 UK Customer Satisfaction Index

Picture of Mark Gould
UKCSI-January 2025

 

 

 
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The January 2025 UK Customer Satisfaction Index (UKCSI) spotlights the state of customer experience across the UK. Its findings offer potent insights into customer satisfaction, employee engagement, and business performance. Below, we summarise and evaluate three key conclusions from the report, reflecting the ethos of RetailCX: happy colleagues create happy customers who put money in the till. We end with a challenge for retail businesses aiming to thrive in today’s complex environment.
  1. Quality Trumps Cost — Customers Are Willing to Pay for Excellence

The UKCSI reveals that 31.3% of customers prefer excellent service even if it costs more. This figure has remained stable since 2024 but marks a 5.4% increase compared to pre-COVID 2020 levels. Customers cite trust and the reassurance of accessible support as primary drivers of this preference.

Organisations delivering consistently high satisfaction scores are better positioned to grow revenue by engaging with these quality-conscious consumers. For instance, the Retail (Food) sector shows a direct correlation between higher UKCSI scores and sales growth. Companies like M&S, with a sector-leading score of 85.8, continue outperforming peers, underpinned by product quality and customer experience investments.

RetailCX Takeaway: Quality over price is a sustainable competitive strategy—retailers who neglect service investments risk being caught in a race to the bottom. Instead, doubling down on training colleagues to offer exceptional service builds trust and loyalty, increasing the potential for customers to spend more.

 

  1. Service Failures Are a Hidden Profit Drain

Service failures and customer complaints cost UK organisations a staggering £7.3 billion monthly. The report highlights that 64% of employees spend an average of four days per month dealing with issues caused by service failures. Unsurprisingly, customers who encounter problems rate their overall satisfaction at 59.5, significantly lower than the average of 79.1 for those without issues.

Root-cause analysis and preventive measures are crucial for mitigating these costs. Evidence suggests that investing in employee training and robust systems to address recurring issues can transform operational efficiency and reduce the burden of service failures on both employees and profitability.

RetailCX Takeaway: Empower colleagues with the skills and autonomy to resolve issues at the first touchpoint. This reduces costs and boosts employee engagement and customer trust, creating a win-win for everyone involved.

 

  1. Technology Alone Won’t Save You — Customers Demand a Human Touch

While technology is a powerful enabler, the UKCSI warns against its over-reliance. Customers are cautious about the genuine benefits of technological advancements in service. The most successful organisations seamlessly integrate digital tools with empathetic human interaction, ensuring customers can quickly reach a knowledgeable, caring colleague when needed.

For example, sectors like Retail (Food), Banks and Building Societies excel at balancing technological efficiencies with a human touch. High-performing businesses in these sectors demonstrate that operational excellence must be combined with emotional connection, transparency, and ethical practices.

RetailCX Takeaway: Don’t use AI as a crutch; use it to complement the in-person experience. Train colleagues to leverage digital tools effectively while maintaining empathy and care that no algorithm can replicate. Customers value organisations that demonstrate genuine care and ethical service practices.

 

The Challenge: Transforming Colleague Engagement to Boost Customer Experience

The UKCSI clarifies that organisations that outperform their peers understand the link between colleague engagement, customer satisfaction, and commercial outcomes. Yet many businesses fall into the trap of cutting training and service investments during economic uncertainty. This short-term thinking only deepens long-term challenges.

We advocate a shift in perspective: treat colleagues as the frontline ambassadors of your brand. Invest in their development, create a culture of accountability and care, and empower them to deliver exceptional experiences. The businesses that thrive in 2025 will combine technological efficiency with a motivated, empathetic workforce.

Your Action Plan:

  1. Reassess Priorities: Evaluate whether your current customer and colleague experience investments align with your long-term goals.
  2. Foster Accountability: Engage colleagues in identifying pain points and innovating solutions.
  3. Blend People and Technology: Ensure that human and digital channels are complementary, not competing.
  4. Measure and Improve: Use tools like UKCSI to benchmark satisfaction and quantify the return on investment in customer experience.

As the UKCSI highlights, customer satisfaction is not a “nice-to-have” but a critical driver of growth, loyalty, and resilience. Retailers who prioritise their colleagues and invest in meaningful, ethical customer experiences will survive and thrive. Although this is a UK study, the principles outlined are equally relevant to Ireland and Irish consumers. Businesses across the Irish market face similar challenges and opportunities, making it essential to adopt these insights for success. Now is the time to act. What changes will you champion to improve the experiences that define your brand?

If you would like an introductory conversation without obligation about how we can assist you in prioritising and implementing business improvements, please contact us at https://www.retailcx.ie/contact.