Table of Contents
Executive Summary
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- Impact of COVID-19 on department stores
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- Figure 1: Short, medium and long-term impact of COVID-19 on department stores, 24 May 2021
- The market
- Sales plummet hit by store closures due to COVID-19
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- Figure 2: UK department store sector size and forecast, best and worst-case scenario, 2016-26, prepared on 1 July 2021
- Companies and brands
- John Lewis grows its share
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- Figure 3: Leading department stores, estimated market shares, 2018-20
- Online sales soar as stores close
- John Lewis is the most trusted, while Liberty perceived as fun
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- Figure 4: Attitudes towards and usage of selected brands, 2020-21
- The consumer
- Big decline in department store usage
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- Figure 5: Department stores used in the last 12 months, May 2019-May 2021
- 27% shop via a smartphone
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- Figure 6: How shoppers have bought from department stores in the past 12 months, May 2021
- Big decline in purchasing of key fashion category
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- Figure 7: What consumers bought from department stores in February 2021 and May 2021
- Range of brands/products entice shoppers
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- Figure 8: How satisfied shoppers are with department stores, May 2021
- 25% use social media for help
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- Figure 9: Current and future behaviours, May 2021
- Department stores should collaborate with local brands
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- Figure 10: Consumers interest in innovations, May 2021
- Pureplays steal spend from shoppers
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- Figure 11: Reasons for not shopping at department stores, May 2021
Issues and Insights
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- Impact of COVID-19 on the department store sector
- Closure of stores hits them hard
- Too reliant on fashion
- Weakened by collapse in international tourism
- Responding to shift online
- What are the main opportunities for growth for department stores?
- Expanding home categories
- Immersive in-store experiences
- Collaborations with unique brands
- Filling gap in the market left by Debenhams
The Market – Key Takeaways
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- Sales plummet hit by store closures due to COVID-19
- Reliance on fashion leads to losses
- Collapse in international tourism has detrimental impact
Market Size and Forecast
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- Short, medium and long-term impact on department stores
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- Figure 12: Short, medium and long-term impact of COVID-19 on department stores, 24 May 2021
- Department store sales plummet as stores suffer large losses
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- Figure 13: UK department store sector size and forecast, best and worst-case scenario, 2016-26, prepared on 1 July 2021
- Figure 14: UK department store sector size and forecast, at constant and current prices, 2016-26, prepared on 1 July 2021
- Store closures have heavily impacted the market
- Market drivers and assumptions
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- Figure 15: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 1 July 2021)
- Forecast methodology
Consumer Spending
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- COVID-19 causes declines across all categories
- Reliance on fashion leads to losses
- Home and garden emerges as one of the strongest categories
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- Figure 16: Consumer spending on the core department store categories, 2016-20
Market Drivers
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- Tourism
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- Figure 17: Number of inbound tourists and tourist expenditure in the UK, 2009-20
- Brexit fears
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- Figure 18: Brexit fears, 29 April-6 May 2021
- Footfall will be slow to recover
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- Figure 19: Google COVID-19 Community Mobility Reports, UK (national), average monthly change, 15 February 2020-30 April 2021
- Online sales
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- Figure 20: Internet sales as a proportion of total retail sales, 2010-20
Companies and Brands – Key Takeaways
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- John Lewis grows its share
- Debenhams moves fully online after acquisition by boohoo
- Online sales soar as stores close
Leading Players
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- Note on department store sales
- Debenhams bought by boohoo, and M&S makes changes
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- Figure 21: Leading department stores, net sales, 2016-20
- Frasers Group focuses on premium offerings
- Beales comes back after administration
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- Figure 22: Leading department stores, outlet numbers, 2016-20
- John Lewis shutters stores as it suffers losses and focuses on online
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- Figure 23: Leading department stores, operating profits, 2016-20
- Figure 24: Leading department stores, estimated sales per outlet, 2016-20
Market Share
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- John Lewis grows its share, while Debenhams’ declines
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- Figure 25: Leading department stores, estimated market shares, 2018-20
- Figure 26: Leading department stores, market shares, 2016-20
Online
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- Online sales soar as stores close
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- Figure 27: Select leading department stores, estimated online revenues, 2016-20
- Online sales now make up three quarters of all John Lewis revenue
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- Figure 28: Estimated online share of select leading department stores’ total revenues, 2016-20
- Figure 29: Estimated online department store market size, 2016-20
- Note on methodology
Launch Activity and Innovation
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- Department stores focus on in-store experiences
- Harrods opens beauty concept store at Intu Lakeside
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- Figure 30: H Beauty store in Milton Keynes 2021
- Selfridges teams up with SoulCycle to open first Outside Studio
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- Figure 31: SoulCycle Studio at Selfridges 2021
- John Lewis to roll out ‘hundreds’ of shop-in-shops inside Waitrose stores
- Department stores experiment with augmented reality technologies
- Liberty to offer virtual shopping experiences with Hero
- John Lewis trials augmented reality sofa
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- Figure 32: John Lewis AR sofa feature 2020
- Retailers focus on expanding ecommerce capabilities
- John Lewis teams up with furniture rental service Fat Llama
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- Figure 33: Fat Llama and John Lewis rental service 2020
- Fortnum & Mason launches high-end dinner delivery service
- Harrods offers remote personal shopping service for selected customers
- Department stores drive sustainability agendas
- Handbag Clinic launches partnership with Fenwick
- Fortnum & Mason launch ‘Hungry Minds’ podcast in digital push
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- Figure 34: Fortnum & Mason podcast 2020
- Selfridges to sell vertically farmed produce from its own store
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- Figure 35: Project Earth food edit 2020
- Launches
- House of Fraser launches ‘staying in-in’ collection
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- Figure 36: House of Fraser’s In-In Collection 2020
- Harrods opens outlet at Westfield to help shift excess stock
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- Figure 37: Harrods outlet at Westfield London
- John Lewis reveals own-brand label AnyDay
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- Figure 38: John Lewis AnyDay range 2021
Advertising and Marketing Activity
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- Ad spending significantly drops in 2020
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- Figure 39: Recorded above-the-line, online display and direct mail total advertising expenditure by selected leading UK department stores, 2016-January-April 2021
- M&S top advertising spender in 2020
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- Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure, by selected leading UK department stores, 2016-20
- Advertising moved indoors
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- Figure 41: Recorded above-the-line, online display and direct mail total advertising expenditure by selected leading UK department stores, by media type, 2020
- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure of selected leading UK department stores, by media type, 2020
- Key campaigns
- Retailers launch anticipated Christmas adverts
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- Figure 43: Waitrose & Partners Christmas advert, 2020
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- Figure 44: A Very British Bear advert 2020
- Figure 45: M&S Christmas advert 2020
- Selfridges launches Project Earth campaign
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- Figure 46: Selfridges Project earth campaign 2020
- M&S ‘Remarksable’ campaign
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- Figure 47: M&S Remarksable campaign 2020
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 48: Attitudes towards and usage of selected brands, 2020-21
- Key brand metrics
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- Figure 49: Key metrics for selected brands, 2020-21
- Brand attitudes: Selfridges provides a great online service
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- Figure 50: Attitudes, by brand, 2020-21
- Brand personality: Liberty perceived as fun
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- Figure 51: Brand personality – Macro image, 2020-21
- John Lewis seen as responsive
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- Figure 52: Brand personality – Micro image, 2020-21
- Brand analysis
- Selfridges perceived as fun
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- Figure 53: User profile of Selfridges, 2021
- Liberty needs to do more to raise brand awareness
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- Figure 54: User profile of Liberty, 2021
- John Lewis & Partners is a favourite brand
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- Figure 55: User profile of John Lewis & Partners, 2020
- Harrods seen as diverse
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- Figure 56: User profile of Harrods, 2021
- House of Fraser needs to do more to stand out
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- Figure 57: User profile of House of Fraser, 2021
- Reading word clouds
The Consumer – Key Takeaways
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- Big decline in department store usage
- Reliance on fashion hurts department stores
- Department stores should collaborate with local brands
Impact of COVID-19 on Consumer Behaviour
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- Consumers shop more online
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- Figure 58: Changes to consumer habits due to COVID-19, 10-18 June 2021
- Shoppers enjoy a day out shopping as non-essential retail reopens
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- Figure 59: Activities done in the last week by consumers, 10-18 June 2021
- Shoppers spend less on clothing and accessories
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- Figure 60: Consumers’ shopping habits due to COVID-19, 10-18 June 2021
Where They Shop
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- Big decline in department store usage
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- Figure 61: Department stores used in the last 12 months, May 2019-May 2021
- John Lewis’s focus on ecommerce capabilities pays off
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- Figure 62: Department stores used in-store and online in the last 12 months, May 2021
- 16-34s keen department store shoppers
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- Figure 63: Who buys from department stores, by age group, May 2021
- ABs favour department stores
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- Figure 64: Department stores used in-store and online in the last 12 months, by socio-economic groups, May 2021, % who bought from the following department stores
- Most are loyal to one retailer
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- Figure 65: Repertoire of how many department stores they shop at, May 2021
How They Shop
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- 27% shop via a smartphone
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- Figure 66: How shoppers have bought from department stores in the past 12 months, May 2021
- 16-34s favour shopping via a smartphone
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- Figure 67: How shoppers have bought from department stores in the past 12 months, May 2021
What They Buy
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- Big decline in purchasing of key fashion category
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- Figure 68: What consumers bought from department stores in February 2021 and May 2021
- Furniture popular as shoppers spend more time at home
- Appealing to older shoppers
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- Figure 69: What consumers bought from department stores in the last 12 months, May 2021
- A third buy one type of product at department stores
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- Figure 70: Repertoire of what they buy, May 2021
Satisfaction with Department Stores
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- Range of brands/products entice shoppers
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- Figure 71: How satisfied shoppers are with department stores, May 2021
- Dealing with issues of product availability
- 34-54s happy with online services at department stores
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- Figure 72: How satisfied shoppers are with department stores online services, by age group, May 2021
- Shoppers engage with store environments
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- Figure 73: How satisfied shoppers are with department stores’ store environments, by age group, May 2021
Current and Future Behaviour of Department Store Shoppers
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- Adapting click-and-collect
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- Figure 74: Current and future behaviours, May 2021
- 16-34s use social media for help
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- Figure 75: Current and future behaviours, by age group, May 2021
- Males interested in attending an online event
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- Figure 76: Consumers who would be interested in the following, by gender, May 2021
Interest in In-Store Innovations
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- Contactless shopping appeals to shoppers
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- Figure 77: Consumers interest in innovations, May 2021
- Repair stations appeal to a quarter of shoppers
- Department stores should collaborate with local brands
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- Figure 78: Consumers interest in innovations, by age group, May 2021
Reasons for Not Shopping at Department Stores
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- Online-only retailers steal spend from shoppers
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- Figure 79: Reasons for not shopping at department stores, May 2021
- Shoppers cut back on discretionary spending
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 80: UK department store sector size and forecast, best and worst-case scenario, 2016-26, prepared on 1 July 2021
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