Beyond the Basket - 09/09/25

Tuesday 9th September | Join Free

Hello and welcome to your Tuesday Beyond the Basket brief. Apple’s about to tell us why we need new phones, the harder question is whether anyone’s buying. UK shoppers spent big in the August sun, but confidence is still sliding. Add in Facebook’s 21% jump in lead costs and Shopify’s AI support loop nightmare, there’s a lot to consider. Let’s jump in👇

In today’s beyond the basket:
📈 UK Retail Sales Up, Christmas Tax Clouds Ahead
💸 Facebook Ad Costs Climb, Traffic Wins Over Leads
🛋️ Dunelm Warns of Weak Demand Despite Profit Rise
💄 L’Oréal Paris Overtakes Charlotte Tilbury on UK Social
🤖 Shopify AI Support Loops Anger Merchants

+plus four deeper reads, articles and analysis to help you stay ahead of the pack.

TL;DR: UK retail sales rose 3.1% YoY in August, lifted by sunny weather and an interest rate cut, but consumer confidence continues to slide amid food inflation, rising energy bills, and fears of tax hikes in the Autumn Budget.

Why It Matters: Strong summer trading shows shoppers will spend when conditions align, with online non-food sales up 2.7% after last year’s slump. But much of the food sales growth came from price inflation, not volume, masking weaker demand. With confidence down for a third straight month and the Budget landing just before Black Friday, peak season is set against a backdrop of economic anxiety. Retailers risk softening discretionary spend even as costs remain high.

Your Move: Bank the summer boost but don’t overextend, tighten holiday forecasting, prep promotional levers early, and model scenarios for a cautious consumer heading into Q4.

TL;DR: Benchmark data shows Facebook lead gen campaign costs jumped 21% to $27.66 per lead, while traffic campaigns gained efficiency with lower CPCs and higher CTRs.

Why It Matters: Rising lead costs signal tougher economics for acquisition-heavy brands, especially in categories like dental and finance where CPLs spiked above $70. Yet, Facebook still undercuts Google Ads, where average CPL tops $70.11. Traffic campaigns are a bright spot: click-through rates rose nearly 9%, with Shopping and Gifts hitting a 4.13% CTR and ultra-low CPCs at $0.34. This divergence suggests that awareness and engagement strategies are thriving, while bottom-funnel lead capture is under pressure.

Your Move: Rebalance budgets, lean on traffic campaigns to build cost-efficient engagement, but tighten lead targeting, qualify prospects aggressively, and test new creative to protect ROI.

TL;DR: Dunelm posted a 2.7% rise in pre-tax profit (£211m) for FY2025 and reports “pleasing” early FY2026 trading, but warned it has yet to see sustained recovery in consumer demand, sending shares down over 7%.

Why It Matters: The homeware retailer is balancing inflation-driven caution with growth moves: more promotions, an AI-powered search push, and plans for 5–10 new superstores. But the signal for the wider sector is clear: value remains the draw, not a demand rebound. With consumer confidence shaky and tax rises looming, even solid financials aren’t lifting market sentiment. Dunelm’s playbook of discounts + AI-driven retention highlights how retailers are trying to protect margins while shoppers remain wary.

Your Move: Expect caution to linger, keep value messaging sharp, lean on AI for retention and personalization, and avoid overestimating recovery in Q4 forecasts.

TL;DR: L’Oréal Paris topped TikTok and Instagram beauty rankings with £238.5m EMV on TikTok and £28.6m on Instagram, surpassing Charlotte Tilbury.

Why It Matters: Social media is now the primary battleground for beauty retail visibility. L’Oréal’s dominance came from 14,523 TikToks generating 5.1B views, proving that scale and creator partnerships drive top-of-funnel brand power. But engagement rates tell another story: brands like NYX (6.5% Instagram ER) and Kérastase (4.9% vs Garnier’s 3.1%) show that quality beats volume in sustaining consumer attention. For UK retailers, Tilbury’s slip underscores how international competition is intensifying, even for beloved homegrown players.

Your Move: Split budgets by platform purpose: use TikTok for scale through mass creator output, and Instagram for loyalty with fewer high-engagement partners. Track engagement rate, not just EMV, to avoid vanity metrics. If you’re a local brand, build defensible storytelling rooted in community before global players squeeze share.

Wider Context: Gen Z drives nearly half of online beauty buys — They account for 46% of digital health and beauty purchases, with online baskets averaging $138.61 vs $84.67 in-store, according to a recent report by PYMNTS. Read More >

TL;DR: Merchants report being stuck in AI chatbot loops on Shopify, unable to reach human support for urgent technical issues.

Why It Matters: Shopify’s AI-first support restructuring is eroding one of its historical strengths: fast, reliable human help. Complaints now span both standard plans and Shopify Plus, raising doubts about value at premium price points. With holiday sales approaching, merchants face elevated risk if payment or integration errors can’t be resolved quickly.

Your Move: Don’t wait for Q4 chaos, map out backup support channels now (forums, agencies, dev partners), document and escalate issues publicly when stuck, and revisit your longer-term platform risk if Shopify support continues to degrade.

Curated deep dives, longer reads and analysis shaping the future of retail and ecommerce.

Wholesale brand leaders speak on effects of wholesale on DTC channels
Glossy (6 min read) Read Here ›
Survey explores how wholesale partnerships shape — and sometimes strain — direct sales performance.

Google the ‘Teflon monopolist’ braces for more ad tech challenges
Digiday (7 min read) Read Here ›
Analysis of why Google keeps dodging industry upheavals even under regulatory pressure.

Starbucks CEO Brian Niccol on turnaround progress one year in
CNBC (5 min read) Read Here ›
How the coffee giant is reshaping operations, store formats, and growth priorities.

Europe’s economic decline: Why ‘eurosclerosis’ threatens growth
PYMNTS Op-Ed (8 min read) Read Here ›
David S. Evans argues structural stagnation is eroding Europe’s competitiveness.