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Okay. Good morning, everyone. Thank you for taking the time to join us today on our webinar. Today, we are privileged to have Heike, who is based in Sydney, who looks after the wealth management teams research. Today, she'll be walking us through some asset allocation trends. This is with a particular focus on the APAC region and how these forces are reshaping portfolios.

So I'll definitely encourage any of you to ask any questions during this webinar with the Q&A button located at the bottom. Any questions that we might not be able to get to, we will get back to you on those afterwards. So the recording and the slides will be shared afterwards as well. Okay. So without further ado, I'll pass the time on over to Heike. Over to you, Heike.

Thank you, Irene. Yes, welcome, everybody. Like Irene said, my name is Heike, I'm part of the wealth management team here in Sydney or part of the banking and payments team. And yes, today's presentation will be on asset allocation trends in the Asia Pacific region.

So the main focus is Asia Pacific, but if there is any data points you are interested in from a specific country or global data point, please feel free to reach out to either myself or to Irene later on.

Okay. Getting started straight away. So today's agenda, I want to talk about the current investment environment. First of all. Then I will be going on to talk about more specific trends and investment preferences. And after that, I will be focusing on the high net worth space and the last section will be about targeting.

Okay. Investment environment. Just setting the scene here really. But I think the biggest theme we are seeing at the moment and the big part of this presentation will be geopolitical risk, geopolitical uncertainty. It's really the backdrop to a lot of what we are seeing in asset allocation at the moment. So as you can see, geopolitical risk is really high, but it's also coming through in much more frequent and sharper spikes. So you can see it never really quite goes away, but every flash point, like be it the Russia-Ukraine war, the Gaza escalation or more recent concerns in Iran, it really brings it back up. So for wealth managers, it really matters in 2 ways. So first of all, you've got portfolio construction, of course, and clients are much more aware of concentration risk about energy shocks. And they are much more open to including diversifiers in their portfolio, but they are also much more open to holding much more dry powder.

And secondly, and it's probably equally important, we've got the communication issue. In periods like this, clients really want to know that changes are not just happening in the background. They want to be sure that somebody is really paying attention, that there's a plan in place. So the challenge for firms is not to react dramatically to every headline because it normally creates just more noise than doing anything good. It's being there, monitoring risk properly and explaining what matters and what doesn't matter and communicating that in a clear way.

Just highlighting my point here again, so in 2025, 68% of wealth managers in Asia Pacific agreed that geopolitical risks are much more important drivers of asset allocation decisions than economic ones. Two years prior in 2023, that proportion was 57%. So obviously, that's got an effect on markets but also on risk sentiment. What you can see here is retail investment holdings growth. So you've got the past 3 years and the coming 3 years, so the X-axis is a forecast and then you've got historic data on the Y-axis, and this is where uncertainty really starts to show up in actual investor behavior. So risk assets, they are still growing. It's not a full retreat from markets but growth, it's really slowing down across equities, bonds, mutual funds and ETFs. But then on the flip side, you've got deposits where we are seeing higher growth than in the past 3 years. So it's really because investors are looking for safety. They are becoming more cautious. They're becoming more liquidity focused and they're also becoming much more selective where they're really taking risk.

So here, following on from the previous slide about growing uncertainty and retail investment growth. This one here shows the next effect coming through in overall liquid wealth growth. So the main story here is one of moderation. So growth, it is still there, but it's becoming weaker across the market. And this really fits in with that more volatile backdrop and less support from risk assets, greater volatility. The high net worth segment, that's the really blue one. That stands out. So it's much more resilient because it's typically -- it's better diversified. They are less forced to derisk and they are better able to capitalize on opportunities should any arise. The lower affluent segments, on the other hand, they are much more constrained by inflation pressures and cash flow pressures. So it means growth is expected to visibly slow down over the coming years.

Moving on to investment preferences. And I really do like that slide here because it puts the recent caution we just talked about. It puts it into context into a longer-term context. Though even we have that uncertainty and volatility and it's making investors much more selective today, the broader trend in Asia Pacific actually has been one towards more market-based risk assets. Deposits, they still remain a good chunk, though, and that's a key difference to the global picture, if you look over to the right. So Asia Pacific, we are still moving in the same direction here, but it's much more gradual. So compared to global markets, we tell investors here, they still look a bit more conservative, and they keep a larger share really in savings products. However, we are still seeing that same rotation out of deposits into market-based assets just a bit at a slower pace.

This one here, it's pretty much just a practical consequence of the uncertainty backdrop we've been discussing. So when markets feel more volatile, investors are much more willing to hand over control or to actually work with professionals rather than just doing everything themselves. You can see here on the left, that's in Asia Pacific, level of agreement that volatility is driving uptake of managed mandates that has increased quite a bit since 2023. So it's not just really a theoretical point here. It's wealth managers themselves. They are seeing much stronger of a shift towards advice-led towards discretionary solutions when markets are really getting harder to navigate. But the key takeaway I really want to make here is volatility is not just a risk. It really can be an opportunity as well. When clients feel less confident, the case for managed mandate, it's becoming much stronger. But yes, once again, it's also raising the bar because obviously, providers need to navigate that volatility, and you've got to have a communication strategy in place just to really justify these fees.

This one here, it really goes hand-in-hand with the previous slide as well. So we are seeing a lot of demand for active ETFs, and that's really a direct result of those -- of that heightened market volatility. Recent turmoil is really driving demand for liquid, but also for actively managed solutions. In Asia Pacific, as you can see here, it's circled, 71% of wealth managers agree that investors are increasingly opting for active as opposed to passive ETFs. If you look at the data, though, active ETFs, they are still a relatively small segment. They are 10% of the total ETF universe, they are growing pretty quickly though. And we are seeing a big opportunity in India, Malaysia and China, especially. Flows they are coming less from mutual funds, though -- sorry, less from passive ETFs. It's coming more from mutual funds. And it's mainly because they are a bit more inflexible. And there's also a lot of flows going into fixed income structures at the moment in active ETFs mainly because there is much more in terms of inefficiencies and market inefficiencies, but there's also a greater need for more dynamic duration management, especially at the moment.

Another trend I want to talk about is ESG. There's been quite a lot of chatter recently that demand for ESG is subsiding, but that's really not what we are seeing in our data. ESG, it's really still a big, big part of the high net worth portfolio. And Asia Pacific, in particular, it stands out here as one of the growth markets. We are seeing stronger regulation coming out, but also more product development and just a growing investor base and all of that is really supporting growth at the moment here in Asia Pacific.

There's been a lot of political noise, especially coming from the U.S. And we've seen some pushback in other segments. But yes, the high net worth market, it's really still growing strongly. We have seen a bit of a retreat in the retail space, though. But it's pretty much just a direct result of more challenging investment environment because investors are really becoming more outcome focused. You've got this greater emphasis on performance on capital preservation. And it means that ESG is becoming much more of a secondary consideration, kind of a secondary filter. But it really just means you have to show that there's no compromise between these goals because, yes, overall, I think ESG has just become more selective rather than less relevant. So clients are really asking these harder questions. So it's just a matter for wealth managers to be able to position ESG accordingly and to really answer these questions.

I want to talk about tokenized assets now. As you can see on the left, demand is particularly strong in Americas, but then also in Asia Pacific. As tokenization, it's really moving beyond that niche digital asset theme. And what makes it really relevant is not the technology itself, not only, It's the fact that it can open up access to these traditionally hard to access investments. So it's really bringing down some of these usual barriers, like high minimums, limited access and admin complexity, so you've got investments such as private credit, real estate or just other alternatives, which are becoming much more readily available through fractional ownership. And especially at the moment, we are seeing strong demand for that, just as investors are really looking for these new means of diversification. But what it really means is that the competitive edge, it's shifting because it's no longer just about providing access to the sophisticated investments. It's about doing that in a more accessible and scalable way.

Moving on to the high net worth space. What you can see here is that the high net worth portfolio in Asia Pacific, it actually has become more equity focused since the pandemic, and it's pretty much just a stronger market and a bit of [ FOMO ] mixed in there. Allocations to real estate and commodities have come down. Bonds have been pretty much stable, perhaps gone up a bit. But if you look at the global data on the right here, it's quite useful as a comparison because you can see it's not just an Asia Pacific story. It's a global story. But the key takeaway is that rising equity allocations, they really have supported growth over the past few years, but it's also really increasing concentration risk. So it really means rebalancing and diversification have to become much more important, especially because AI-related related tech exposure. It really has been driving much of the performance. So we are seeing a lot of risk there.

Yes, commodities. I feel like I do have to talk about commodities this year. They absolutely have moved back into focus. We've got increased geopolitical risk, inflation concerns, supply side uncertainties. So all of this has brought commodities back as a diversifier but also just as a performance driver.

Precious metals, as you can see, there's been a clear winner here. But at least if you look back over the past year or so, more recently, it's been a bit of a mixed bag because we have a stronger U.S. dollar. We've got higher treasury yields, and rate cuts also seem quite unlikely any time soon. So it really means gold has become less attractive when comparing it to income-generating products.

Yes, much recently. So the energy sector obviously has come out as a top performer. But having a look at the actual high net worth commodity portfolio now, I was saying before, the proportion allocated to commodities, it actually has gone downward somewhat leading up to 2025. That's when we went into the field. But since then, it would have crept up based on performance alone. But if you have a quick look, physical gold, you always used to be the #1 in recent years as part of the commodity portfolio, it actually is not that anymore. It has been going down a bit. And that's really just because investors are looking for commodity exposure in a way that is more defensive, but it's also easy to access rather than just relying on these complex structures or direct holdings.

So what we've really seen is what's highlighted here. We've seen a strong move towards ETF products. So I guess my key message here is that commodity exposure is becoming very simple, and it's becoming more liquid.

Okay. That's a big one. That's the average high net worth portfolio for alternatives in Asia Pacific, and we are comparing 2024 to 2025. There's a lot going on here, but I want to talk about 4 trends in particular. So we've got a move away from cryptocurrencies. Then we've got the realization that NFTs, it's just basically a fad. We have a move into hedge funds, and then we've got a total explosion of private debt funds. So breaking it down, I don't want to talk about crypto and NFTs a lot. But we're in the middle of a crypto winter, cryptocurrencies, they are very risky, so investors are just not willing to give an extremely volatile asset a large role in their portfolios, especially not at the moment.

With NFTs, which you can see at the bottom, much of the earlier hype was really tied to novelty to media retention. But then we also have a lot of the underlying assets that were just much more risky than initially assumed. So as you can see, it has really gone down to 1% of the average high net worth portfolio -- alternative portfolio. If you look at this at the entire portfolio, it's really marginal.

If you go to hedge funds, and I talked about this before, investors are really looking for more active management, and it really has propelled demand for hedge funds. And hedge funds actually had a really good year, the best year since 2009 and the strongest inflow since 2007. They had inflows of EUR 116 billion in net investor inflows. But looking forward, we really expect this trend to continue because volatility is not likely to subside anytime soon.

At the last, I want to talk about private debt funds. It has been in the media a lot as well. And asset managers really have been increasingly targeting private investors. And there's actually been a lot of demand because you've got higher income and then the market also looked much more insulated than public credit. But yes, there's been a lot of concerns recently about portfolio quality, especially to software lending because we are seeing a lot of disruption, obviously, from AI.

Most of you would remember, is the BlackRock example, which had to limit withdrawals. So our take is that it will slow down. We will see less inflows. But the main thing, the main takeaway is that we will have a higher focus on quality managers in the private debt space, and investors will be looking for structures with much clearer liquidity terms. But across the entire alternative sleeve, investors are just looking for more quality products, and they're going away from speculative exposures. So for wealth managers, what it really means is due diligence is becoming much more important and also portfolio fit. And that is the last section on targeting.

What you can see here on this slide is that investment behavior, it changes quite sharply with affluence. So as clients move up the wealth ladder, they are not only more likely to hold an investment product. They're also much more likely to allocate a greater share to them. So it really tells you where that commercial inflection points sits. The mass market, they remain very heavily deposit-led, even the emerging affluent allocates the biggest shares to savings. But once clients hit that mass affluent threshold, investment penetration is becoming much broader. So mass market, simply simple entry products, emerging affluent, you can start nudging a bit. But once you come to the mass affluent space, it's where a broader investment proposition really becomes much more compelling. And as you can see here on the right, on average, Lima's affluent hold EUR 200,000 in liquid assets -- sorry, that's liquid investments. So that actually excludes deposit. It's only mutual funds, equities, et cetera. And this is when more sophisticated advice actually becomes commercially viable.

I now want to have a look at the different generations that make up the investor base. Gen Z millennials, they already account for a big share of the global investor base, and they will continue gaining importance just because wealth is being passed on from one generation to younger generations. But what stands out here in Asia Pacific is that younger generation, they are really investing at meaningful rates already. So if you look at investment penetration, it's actually highest among millennials in Asia Pacific. The issue is they engage differently, though. They're much more likely to self-manage and to use digital platforms. Older cohorts on the other hand, they are still much more advice led. So for providers, the priority is really to engage early on with these hybrid models and then provide -- have digital models in place, but then have advice on demand. Further down the line, you've got these live events, you've got inheritance or people just accumulate wealth over time, and that's when the advice needs change. So the real opportunity here is to get the foot into the door early and then deepen the relationship later on as the relationship becomes more valuable.

This slide here, we talked a lot about ETFs before. We talked about ETFs in the context of liquidity, active strategies and just then commodities. But I want to have a look at some demographics now. So what you can see is the proportion of liquid assets, different segments allocate to ETFs comparing 2018 and '25. First of all, you can see allocations pretty much increased across the board. However, some segments stand out. We've got the mass affluent and then also younger segments. And also, it's not only DIY investors anymore. You also see ETFs much more coming up in the advice portfolio. It's not high value for the wealth managers, but it's really a clear signal where demand is heading. So for me, the recommendation is that you can't ignore these investors, but use ETFs basically as an entry point. They're low cost, they're transparent, they're easy to understand, but then have a view of deepening the relationship later on over time as the relationship becomes more complex.

Our last slide, some key takeouts before I finish. We've talked about this a lot. Geopolitical uncertainty is no major portfolio driver, and investor behavior, it's becoming more defensive. It's becoming more selective. As a result, we are also seeing slower liquid wealth growth at the moment, especially outside that high net worth segment. However, as part of that more long-term trend in Asia Pacific, investors are moving more to market-based assets even though it's slower than globally. We're also seeing strong demand for alternatives pretty much as investors are looking for diversifiers, but the focus here is really on quality. And in the same context, tokenization is becoming much more relevant as it basically improves access.

Then lastly, we talked about younger generations. Millennials have the highest penetration rates in Asia Pacific, but they do engage differently and hybrid models work most effectively to get the foot into the door early.

Thank you so much for joining me. Irene, I'm passing back to you.

Yes. Thank you, Heike.

So for those who have questions, please leave them in the Q&A tab below.

If you don't have any questions, then feel free to also send us via the e-mail address, you see on the slide here or you can also just separately reach out to me as well.

Okay. So I don't see any questions for now. But yes, if you guys do have anything, please feel free to let us know or if you want a sort of one-on-one demo on how the information can be extracted from the platform. Please also let us know, if you like, a short demonstration as well.

Okay. I think there are no questions. So if there's no further questions, let's go ahead and round up the session.

Thank you, Heike, and thank you, everyone, for your time, and we look forward to seeing you in the next webinar. Thank you.

Thank you so much.

Hello, everyone. Welcome to today's webinar called the U.K. Retail Update. My name is Charlotte, and I work in the Customer Success team at GlobalData. For those of you who aren't familiar with GlobalData, we're one of the world's leading data and analytics providers and our mission is to help our clients decode the future to be innovative and more successful.

Our speakers today will be Sofie Willmott, who is an Associate Director in Retail; and Patrick O'Brien, who is the Retail Research Director. So before we begin, everyone is on mute and the session is recorded. So you will receive an e-mail with the recording and slide deck in a few days' time. And now without further ado, I'm going to pass over to Sofie and Patrick.

Thank you, Charlotte. Hi, everyone, and welcome to our U.K. Retail Update Webinar. Firstly, I'll be showing you our latest consumer confidence data, how shoppers are feeling about their prospects in 2026 and the implications of consumers of the changing macroeconomic landscape. And then I'm going to hand over to my colleague Sofie, who will share with you a very latest sector forecast and also showcase a few hot topic reports that we have coming out.

We really appreciate you taking the time to join us today. We intend to be done within the 30-minute time slot. Please put any questions in the chat. We'll answer you directly offline afterwards.

Okay. So to consumer sentiment, let's have a look at how consumers are feeling. This is our future sentiment index, which is calculated by averaging out the three main measures of confidence, namely economic outlook, personal finances and future retail spending prospects.

Now in the last webinar in January, we asked you all in a poll whether you thought sentiment would improve or get worse by the end of Q1. We showed you the chart here, and sentiment has started heading upwards after a poor few months at the end of 2025. And you were almost completely split on whether sentiment would increase or decrease, 47% said increase, 53% said it would decrease. But well, it got better for a couple of months.

But then, of course, Trump intervened and it got a whole lot worse. In fact, March is 4 was the biggest month-on-month drop since the first COVID lockdown and the only larger drop other than that before COVID was 10 years ago after the Brexit referendum. So there is a lot of fear out there caused directly by the Middle East crisis.

But is it going to go higher or lower in the next few months? So we'd like to ask your thoughts once again. We're going to be doing our next webinar at the end of Q2. So we're just going to open a poll and ask whether you think that consumer confidence will increase or decrease between now and June.

Charlotte, could you please open the poll? That's great. Then do you think consumer confidence could increase or decrease between now and June? Please vote now, and I shall share the results shortly.

In terms of whose confidence is falling, this chart shows the change in confidence since last month by demographic. So it's March compared to February. And as you can see, men are losing confidence more than women. And the youngest adults are, it seems, barely bothered at all as indeed the lower socioeconomic group for the DEs.

On that 18 to 24 years age group, I'm not sure if this is perhaps a lack of experience in how foreign conflicts and oil prices could affect them. But of course, many of them won't be paying energy bills. Maybe they don't see the connection between the Middle East crisis and prices rising and the threat of recession.

But Charlotte, do we have the results of that poll?

Yes, 35% said increase and 65% said decrease.

Okay. Thanks, Charlotte. So yes, that's quite a strong showing for -- falling further. 65-35 is quite a big gap. Of course, it's already at a very low level, but yes, it's hard to argue that there could be falling confidence to come.

So confidence is down, but what does that mean for retail spend? Here, we have adjusted retail volumes, taking into account population increases and seasonality. And we plotted that against the future sentiment index shifted 3 months ahead, which is where we are seeing the greatest historical correlation between sentiment and sales, confidence being a leading indicator.

It seems to indicate that sales will increase further before falling later in the quarter. But in this instance, the shock of the Iran conflict of consumer confidence may well impact retail sales more quickly, causing people to hold off whilst they see what it might mean for their personal finances.

Now I just want to quickly mention our recently released global consumer sentiment tracker dashboard, which is available on our platform, and it covers consumer sentiment in over 50 countries worldwide. The above chart shows confidence at a global level, and you can see that it dipped quite a lot in March, as you could imagine.

Now you can track a number of metrics for each country, and nearly all countries saw confidence fall in March, except curiously in the U.S.A., where younger generations especially do not seem particularly worried about the impact of the crisis in the Middle East. And this shows that the narrative we are experiencing is not necessarily the same narrative being experienced elsewhere.

Now back to the U.K. Investors have already hit retail stock prices harder than overall equity markets. The FTSE All Index is down a bit less than 10% since the crisis began, but U.K. listed retailers are down by, on average, 14%. And it's midsized retailers that are getting hit hardest. Here, we have the drop in share price on the vertical axis and plotted the retailers in order of size on the horizontal axis.

Now it is apparent that home retailers, the ones I have circled there, are being hit hardest, with closest doing comparatively better. Investors are worried that big ticket spend and home projects will get delayed by the uncertainty being caused. And of course, we are coming up to that critical spring period for home improvement.

The recovery from the cost-of-living crisis was already weakening before the Iran conflict. And here are some of the recent media headlines. Unemployment was up, real wage growth was slowing. Already, we can see the immediate direct impact on consumers in the Middle East crisis. Mortgage rate fixes are up about 0.5 percentage points already and could go higher if the Bank of England increases base rates.

We've already seen fuel prices increase at the pump. And food price inflation, which has been decelerating, will start to accelerate again to almost 4% in the coming months based on forecast from our colleagues at TS Lombard.

While this could increase much further, our forecasts are based on the crisis not significantly worsening even if it does not resolve immediately. However, we fully appreciate that the crisis could get much worse in a scenario where food prices increase much higher to, say, 8% is entirely possible.

Energy bills won't rise until July, but are likely going to hit the 3-year high then. In short, consumers are going to have to spend more on food, fuel, mortgages and energy bills this year more than we had previously forecast and will, therefore, have less discretionary income to spend on nonessential retail.

What has been a slow and fragile recovery from the cost of living crisis is threatened to be derailed. Here, we have the ASDA income tracker, which we've reindexed to take into account inflation to give a real discretionary income index.

And it shows that while the spending power has been recovering since April last year, it's still around 6% less than it was before COVID. The impact of fuel, energy and food increases will see much of the gains made in the last 9 months being reversed.

Now we have seen that this shallow recovery has also been very uneven, in that only the upper income earners can really be said to have recovered. Lowest income quintiles still has defined on average GBP 71 per week to cover a shortfall on essentials, either by dipping into savings or increasing debt. And this chart shows how discretionary income has changed by income quintile over the last 3 years.

And you can see that while the recovery was lopsided towards the upper quintiles, the increase in discretionary income that the upper 2 quintiles have achieved has slowed down considerably in the last 12 months. Lower incomes may want to play a very small vial in at such news, but it has major implications for retailers as these are most likely to spend, and they will not be feeling as well as perhaps we might think due to that slowdown in growth.

Which leads us to the savings ratio, which remains high and could start to rise again due to the combination of uncertainty and interest rates now likely to stay higher for longer. We had been expecting interest rates to fall to 3.25% by the end of this year. Now it seems economists expect them to stay at 3.75% in a best case scenario with the possibility of increases.

Consumers with money will be incentivized to save ahead of surging, and this is another aspect to the impact of the crisis. Confidence falling, essential spend increasing, saving more rewarding leads to lower nonfood retail spend.

And with that, I shall hand over to Sofie to show what that means for our forecasts.

So moving on now to our latest U.K. retail forecast for 2026 and beyond. So as we've seen, consumer confidence has tumbled, the macroeconomic environment has become more volatile in the last month, and the economic outlook for the remainder of this year at least look quite different to a month ago. So as a result, we have adjusted our U.K. retail forecast.

So as Pat has mentioned, consumers' budgets are coming under pressure once again with many people still feeling the effects of the cost-of-living crisis. So we do expect nonessential retail spend to be deprioritized.

As a result, we anticipate the overall retail spend growth will be 2.6% in 2026, which is compared to our view in February of 2.7% growth. So this doesn't sound like too much of a change, but the breakdown of what will drive this has changed quite significantly, and I'll cover this in more detail shortly.

So this chart shows U.K. annual retail spend growth on the line, inflation in the base bars and volume growth in the blue bars. The dotted line in the background shows our view of retail growth last month. So you can see that inflation will be the main contributor to growth this year, which we did expect previously, but this has become a bigger driver with volumes now expected to be slightly lower.

So retail inflation for 2026 is now forecast to be 2.2% versus our previous view of 1.8% and volume growth is now forecast to be 0.9% versus -- sorry, 0.4% versus 0.9% previously.

So we expect the higher prices across sectors owing to higher fuel costs impacting the transportation of goods and higher energy costs overall. As prices rise, shoppers will cut back where they can, leading to lower than previously anticipated volume growth this year. But overall, we do still expect to see positive volumes, which will be the first time in a number of years.

The adjustments to our forecast are focused on 2026 at the moment due to the uncertainty of the length of the Iran conflict and the impact on the U.K. economy. But as you know, we do review our U.K. forecast every month as well as our forecast for all of the countries we cover. So we will be making tweaks to 2026 and beyond as necessary, depending on how the world develops.

And then just to mention from 2027 onwards, we are forecasting growth to slow as inflation eases and total growth comes more evenly from both drivers with volumes improving out to 2030.

So looking at our latest forecast by channel, this chart shows annual growth split by channel in the line with online penetration shown in the blue boxes above the chart. So the blue line shows online annual growth and the green line shows in-store or offline growth. The dotted lines in the background show our view in February.

So you can see that we brought down our 2026 forecast for both channels, but a bit more significantly for the online channel, coming down from 3.8% growth previously to 3.6% growth now. The bigger change to online is because 82% of online spend in 2026 is forecast to come from nonfood sectors, and we think nonfood spending is going to be hit harder by the latest changes to consumer sentiment. More on this shortly.

We do still expect that the online channel will continue to outperform this year with online spend rising 3.6%, while offline sales increased by 2.2%. Online spend is forecast to account for 28.2% of the total retail market this year, and that's 41.3% if you just look at nonfood. And we expect this to slowly increase to account for 30% of retail spend by 2030, rising at a fairly consistent pace each year as the online nonfood market matures.

So now delving deeper into how our view of 2026 has changed by sector. As I mentioned earlier, we expect U.K. consumers to prioritize their spending on food and essential items this year. Shoppers will be holding off spending on nonessential products like items for their home, which can be deferred as well as clothing products that they could go without.

So on the left chart here, you can see U.K. food and grocery growth in the line with inflation and volume shown in the beige and blue bars, respectively. So the dotted line in the background shows that our view last month was that food growth would be 3.5% in 2026, but we've now increased our forecast to 3.7%, driven by the higher inflation expected.

With tight margins on food items, we anticipate that grocers will be passing on the higher costs that they'll have to deal with, which will be due to higher energy costs and fertilizer costs and fuel costs.

Consumers have already traded down to cheaper supermarkets or cheaper products at their usual grocers during the cost-of-living crisis. So we don't anticipate there will be too much switching happening. We expect that grocers will continue to capture spend from food service operators as shoppers cut back on eating out and buy treat items or dine-in meal deals to create those more special dinners at home.

In terms of nonfood, shown on the right chart here, we've brought down our forecast with 2026 growth now set to be 1.7% versus our previous view of 2.1%. As you can see, we are forecasting some volume growth, but this will not be the case in all nonfood sectors as we will discuss in a moment. We think retailers will need to pass on some of the higher costs, but this will be more difficult to do in nonfood sectors where demand is weaker.

So looking at the nonfood sectors in more detail, as has been the case for around the past 3 years, we forecast that health and beauty will be the star performer in 2026 with spend rising 3.9%.

This chart shows our view in February in the light-blue bar on the left and our current view in the bright-blue bar. So we have slightly reduced our growth expectations for health and beauty, but we still think this sector will be a priority for shoppers with volumes forecast to rise this year.

The essential nature of toilet trees and some beauty items will mean a chunk of this sector spend will be protected. And additionally, U.K. consumers are continuing to prioritize their health and well-being, viewing buying health and beauty items as investing in bettering themselves.

We think there's some risk to less essential beauty categories like fragrances and makeup, where shoppers will be cutting back. But overall, this sector will take less of a hit than other areas.

Moving on to the nonfood, the next size growth in terms of nonfood sectors for 2026, and that's electricals. So we anticipate that growth will be 2.4% this year, down from our prior view of 2.7% growth.

We're seeing replacement cycles driving some spend amongst more affluent consumers. So items such as laptops bought during the pandemic are now being replaced by those who can afford it. However, this is likely to slow off throughout the year as big ticket purchases are put on hold where possible.

The global memory chip shortage caused by the rising demand for AI infrastructure is impacting the production cost of certain electrical items such as games consoles, laptops, phones, and this is likely to impact the product prices, which may put some consumers off buying.

Despite this, there are some categories within the electrical sector that are essential. For example, if your fridge, washing machine or oven breaks, you have to replace it immediately, and this will safeguard some electrical spend regardless of weaker consumer confidence.

So now looking at the home sectors, the close connection between the housing market and spending on home items is part of the reason why we have brought down our forecast for the home sector this year with combined growth now set to be 1.8% versus 2% previously. With mortgage rates increasing, there will be fewer people likely to be buying for the first time or moving house, which normally helps to stimulate home product purchases.

Coupled with this, weaker consumer confidence will lead to big home projects being deferred and larger nonessential purchases such as the sofa being put off. So we expect that bigger ticket categories like furniture will be harder to hit as well as the DIY sector as home projects are put on hold.

We anticipate that as we've seen throughout the cost-of-living crisis, that homewares will be more resilient this year with shoppers turning to those smaller items like cushions and throws as affordable luxuries that can make living spaces still revitalized without having to spend too much.

Finally, clothing and footwear was forecast to see the lowest growth this year, and the picture remains the same with predicted growth now more than half to 0.5%. As we've seen in recent years, shoppers can fairly easily hold off on clothing purchases to help save money instead shopping from their own wardrobes or just buying and/or just buying the bar essentials like children's wear. We expect this to be the fourth year in a row of volume declines in clothing and footwear.

The accessibility of secondhand clothing also makes it easy for shoppers to switch from buying firsthand from retailers to buying from other consumers on platforms like Vinted and eBay, saving them money while still getting nice in those branding to them.

So here, we can see all the elements of the retail market on one chart. You can see total retail on the far left denoted by the shopping bag icon. The food and nonfood denoted by the books icon and then the nonfood sectors on the right side.

So to summarize what I've talked through, the major changes to our forecast are that nonfood growth is set to be lower this year due to a lower forecast across all sectors, but a major drop in clothing and footwear and a minor drop in health and beauty. Food growth is expected to be higher due to higher inflation.

And all of these changes combined mean that we've brought down our U.K. total forecast growth to 2.6% instead of 2.7% previously. So clearly, 2026 is looking challenging, particularly for nonfood retailers. But as we've said, the extent of the Iran conflict is unknown. And if the war ends soon, consumer confidence could get back on track and the outlook for retail spending may be more positive.

As always, we will be closely tracking changes and we'll be updating our forecast at the end of each month, which you can find on our market analyzer or within our U.K. monthly retail forecast report.

Okay. So for the final section, we wanted to showcase some of our recent topical insights that we thought you might find interesting. Just to remind you, each month, we run a survey of 2,000 nationally representative consumers. And most of the data collected in that survey does feed into our regular reports like our consumer sentiment report, but we do have some space in the survey to add in questions on newer key topics that we haven't covered elsewhere.

We then create short topics reports using this data usually three reports a month. So do let us know if there's topics that you would like to see us covered in these reports in the future.

So in the next few days, we'll be publishing our report on the impact of GLP-1 or weight loss drugs on user shopping habits. We've been asking for about 6 months now whether respondents are taking GLP-1 medication. And in our survey earlier this month, we asked these respondents how their shopping habits have changed since taking medication.

So of those respondents who are taking weight loss drugs, over 65% have changed their food shopping habits. Over half said they're buying fewer snacks and over half said they're making more conscious effort to buy healthy food. And it's interesting to see that given weight loss drugs appetite, over 1/3 say they are now buying less food in general.

The grocers are well aware of the rise in GLP-1 usage, and we've seen lots of products coming out targeted at users. But in terms of where users are buying less, grocers will need to try and find opportunities to entice them to buy to try and maintain their volumes. For example, highlighting those specific claims like high fiber or high protein or potentially creating smaller bite-size snacks, for example, that might appeal more.

And looking at the impact on clothing and footwear now, 61% of GLP-1 users said that clothing and footwear shopping habits have changed. Almost half said they're buying a smaller size now, potentially driving additional sales for clothing retailers, but almost the same proportion, 46.5%, said they have put their clothing packages on hold where they're losing weight.

And over 1/3 are trading down to cheaper items as they don't expect to continue to stay that [ size ] permanently. So it maybe likely to be aid in the growth of some of the value retailers like Shein and Primark.

Items that cover a broader size range, for example, in womenwear that could be small, medium and large rather than 10, 12, 14; might be more appealing to shoppers who are in the process of losing weight. So clothing players should consider this as well as potentially creating products that can be adjusted, for example, like you can find in children's wear where school uniform skirts and child have adjustable waste.

So we wanted to finish on a topic that is very relevant right now as we are fast approaching Easter next weekend. So the Easter intentions report is part of our U.K. occasion series. We have lots of reports in this series with the main occasion report published after the event once we've carried out a consumer survey, asking what shoppers spent, which retailers they bought from, which product areas they purchased.

This is one of the intentions reports. So these are published prior to the major occasions, and they use consumer survey data that is gathered around a month before the event.

So intended participation in Easter is higher once again this year at 68.5%, and this is the highest participation of any occasion after Christmas. Easter celebrations are becoming more home focused this year with a stronger intent to spend time with family and friends and a growing appetite for baking, while fewer shoppers plan to rely on takeaways and meals out. This signals greater demand for ingredients, shared treats and easy activity-based purchases.

Novelty hot cost fun flavors, cupcake kits and small treat bags of chocolates will be popular items for shoppers to indulge in this year.

And then looking at retail categories that shoppers intend to buy in the top row and have already bought in the bottom row, we can see that food and drink and gifting continue to underpin spending for Easter, but the balance has shifted a little bit this year.

The standout change is a sharp uplift in planned spend on other seasonal items, such as home and garden, decoration and seasonal clothing, which really signals a broader spring refresh mindset.

So we'll be publishing a spring [ decor ] report alongside our main Easter report this year as this seems to be a growing area of opportunity for retailers with consumers encouraged by social media to decorate their homes for the spring season, similar to what we've seen in terms of kind of autumn decor and the trend there.

So here are the reports we featured today. A couple of them haven't been published yet, but will be out by the end of the month, our latest forecast report and our GLP-1 hot topic report, but the others you can find on the intelligence center now.

Thank you for joining us today. We hope this has all been useful. And as always, please feel free to share any feedback or further questions you might have, and we'll answer those offline. As Pat mentioned, our next webinar will be at the end of June, and I'll now hand back over to Charlotte.

Thank you so much, Sofie and Patrick, for these super insightful insights on U.K. retail. Thank you for your questions as well, which our team will get back to. You can also e-mail [email protected] if you have any further questions, and everyone will receive the recording and the slide deck in a few days' time when that's ready.

So that concludes the webinar today. Thank you all for attending. Thank you for your time, and thank you to our speakers, and hope you all have a lovely day. Bye-bye.