Table of Contents
Introduction
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- Department store definition
- Sector benchmarks
- Department stores
- Mixed goods retailers
- Accounting policy
- Market shares
- Abbreviations
- Financial definitions
Issues in the Market
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- Is multi-channel the holy grail for department store retailers?
- How can department stores expand through bricks and mortar?
- How can department stores broaden their appeal?
- How can department stores engage the younger generation?
- Which core values resonate with older department store shoppers?
Executive Summary
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- The market
- Volatile performance through the downturn
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- Figure 1: Department store retailers’ sales* at current and constant prices, 2005-15
- Figure 2: Department store retailers’ sales, 2005-15
- Mixed reactions to recession
- 2010 rebound
- Market factors
- Volatile consumer confidence
- Austerity and inflation = uncertainty
- Tourist trade
- The consumer
- John Lewis wins more customers
- Private label will score in 2011
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- Figure 3: Attitudes to department store shopping, January 2011
- Regular shoppers biased to the ABC1 demographic
- Quality and Service Led target group underpins demand in 2010
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- Figure 4: Department store target groups, January 2011
- Companies, brands and innovation
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- Figure 5: Major department store retailers, 2009/10
- What we think
Future Opportunities
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- Guiding Choice
- Prove It
Broader Market Environment
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- Key points
- Austerity + inflation = uncertainty
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- Figure 6: GDP, Personal Disposable Income (PDI), consumer expenditure and savings, at current prices, 2005-15
- Figure 7: GDP, Personal Disposable Income (PDI), consumer expenditure and savings, at constant 2010 prices, 2005-15
- Implications for retail sales
- Consumer confidence remains volatile
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- Figure 8: GFK NOP monthly consumer confidence index, Jan 2005-Dec 2010
- Chinese tourism boosts spend
- Inflation to remain high
- The benefits of getting older
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- Figure 9: Trends and projections in the UK population (‘000s), by age group, 2005-15
- Figure 10: UK: % of total population aged 65+, 2010, 2015 and 2020
Competitive Context
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- Key points
- Consumer spending in main department store categories
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- Figure 11: Consumer spending on key department store markets, 2005-10 (Q1-Q3)
- Competition with other sectors
- Beauty specialists
- Clothing specialists
- Electricals specialists
- Grocers
- CPI remaining high
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- Figure 12: UK: Consumer prices inflation for various categories, Jan 2010-Jan 2011
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Pop-up stores
- Online initiatives
- Harvey Nichols – a mobile pop-up?
- Daimaru Shinsaibashi targets the twenty somethings too
- Selfridges steps up with its ‘open to the world’ philosophy
- Harrods taps into workplace learning trend
- And from across the pond
Sector Size and Forecast
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- Key points
- Technical note
- Past performance
- Forecast
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- Figure 13: Department store retailers’ sales* at current and constant prices, 2005-15
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- Figure 14: Department store retailers’ sales*, 2005-15
- Figure 15: Department store retailers sales as % all retail sales, 2003-15
- Forecast methodology
- Department store prospects
- Who will be the key customers?
- Managing price increases and value perceptions
- Private label – a compelling alternative to premium brands
- Multi-channel support
- Store expansion at home and overseas will drive some medium term growth
- Department store outlet data
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- Figure 16: Identified department stores, outlet numbers, 2003-09
- Mixed goods retailers
- Sector sales and forecasts
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- Figure 17: Mixed goods retailers’ sales, 2005-15
- Outlet data
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- Figure 18: Non-specialised retail outlet numbers, 2004-08
Retail Competitor Analysis
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- Key points
- Market leaders continued to invest
- Older consumers return to the market
- House of Fraser stands out
- Debenhams impacted by constrained family shopper?
- Premium players boosted by overseas tourists and luxury bounce back …
- ... and continue to gain market share
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- Figure 19: UK: Combined market share of Selfridges, Harrods and Harvey Nichols, 2005-09
- Further fallout
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- Figure 20: Major department store retailers, 2009/10
- Market shares
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- Figure 21: Department store retailers, market shares, 2009
Retail Advertising and Promotion
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- Key points
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- Figure 22: Main media advertising spend, by department stores, 2007-10
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- Figure 23: Annual % change in main media advertising spend, by leading department stores, 2007-10
- Spending as percentage of turnover
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- Figure 24: UK: Main advertising spending as percentage of total sales for the ten leading department store chains, 2007-09
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- Figure 25: Major department stores’ main media advertising spend as % of sales, 2008 and 2009
- Spending by media
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- Figure 26: Main media advertising by department stores, by media used, 2010
Brand Elements
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- Brand map
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- Figure 27: Attitudes towards and usage of department store brands, December 2010
- Brand attitudes
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- Figure 28: Attitudes by Department store brand, December 2010
- Brand personality
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- Figure 29: Department store brand personality – macro image, December 2010
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- Figure 30: Department store brand personality – micro image, December 2010
- Correspondence analysis
- Brand experience
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- Figure 31: Department store brand usage, December 2010
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- Figure 32: Satisfaction with various department store brands, February 2010
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- Figure 33: Consideration of department store brands, December 2010
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- Figure 34: Consumer perceptions of current department store brand performance, December 2010
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- Figure 35: Department store brand recommendation – Net Promoter Score, December 2010
- Brand index
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- Figure 36: Department store brand index, December 2010
- Figure 37: Department store brand index vs. recommendation, December 2010
- Target group analysis
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- Figure 38: Target groups, December 2010
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- Figure 39: Department store brand usage, by target groups, December 2010
- Group One – The Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – The Individualists
The Consumer – Which Department Store They Shop
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- Key points
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- Figure 40: Department stores bought from in the last six months, January 2011
- Changing face of the sector
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- Figure 41: Which department stores consumers have bought from in the previous six months, 2001-04, 2006, 2008 and 2011
- Winners and losers
- M&S likely to have gained general merchandise shoppers
- John Lewis forges ahead
- Debenhams expansion fails to drive significantly more shoppers
- House of Fraser nudges up on same size network
- Is Selfridges losing shoppers to House of Fraser?
- TJ Hughes loses out
- Retailer market positioning
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- Figure 42: UK: Market positioning of leading department stores, January 2011
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- Figure 43: Most popular department stores bought from in last six months, by gender, age and socio-economic group, January 2011
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- Figure 44: Next most popular department stores bought from in last six months, by gender, age and socio-economic group, January 2011
- Repertoire – less promiscuous shoppers in this sector
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- Figure 45: department stores bought from, by repertoire of department stores, January 2011
The Consumer – Department Store Shopper Habits
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- Key points
- High conversion rate among the frequent visitors
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- Figure 46: Department store shopping habits, January 2011
- Grabbing the attention of male shoppers
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- Figure 47: Department store shopping habits, by gender, January 2011
- ABC1 bias
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- Figure 48: How often they visit and buy from department stores, by gender, age, socio-economic group and lifestage, January 2011
The Consumer – Attitudes to Department Store Shopping
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- Key points
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- Figure 49: Attitudes to department store shopping, January 2011
- On the whole men quite like department stores
- Target groups
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- Figure 50: Department store target groups, January 2011
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- Figure 51: Attitudes towards department stores, by target groups, January 2011
- Group 1: Convenience Seekers (20%)
- Who are the Convenience Seekers?
- Group 2: Quality and Service Led (15%)
- Who are the Quality and Service Led?
- Group 3: Specials Seekers (15%)
- Who are the Specials Seekers?
- Group 4: Browsers (6%)
- Who are the Browsers?
- Group 5: Indifferent (44%)
- Who are the Indifferent?
- Where people shop by typology
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- Figure 52: Target groups, by department stores bought from in last six months, January 2011
The Consumer – Occasional Shopper Attitudes
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- Key points
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- Figure 53: Why they only shop occasionally, January 2011
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- Figure 54: Why they only shop occasionally, by gender, age and socio-economic group, January 2011
- Young people find better value elsewhere
- Lower socio-economic groups find department stores a bit pricey
- Convenience is important for the ABC1s
- Older people not prepared to travel
- Families in particular find them pricey
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- Figure 55: Those that think they are a bit pricey, by lifestage and presence of children, January 2011
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- Figure 56: Those that think they are a bit pricey or can find better value elsewhere, by special group, January 2011
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- Figure 57: Why they only shop occasionally, by lifestage, presence of children and special group, January 2011
Appendix – Broader Market Environment
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- Population
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- Figure 58: Europe top 7: Population breakdown, by age group, 2005
- Figure 59: Europe top 7: Population breakdown, by age group, 2010
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- Figure 60: Europe top 7: Population breakdown, by age group, 2015
- Figure 61: Europe top 7: Population breakdown, by age group, 2020
- GDP
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- Figure 62: Europe top 7: GDP (in current prices) 2000-Q4 2010
- Figure 63: Europe top 7: GDP growth rates (in constant prices), 2000-Q4 2010
- Consumer spending
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- Figure 64: Europe top 7: Consumer spending (in current prices) 2001-Q4 2010
- Figure 65: Europe top 7: Consumer spending growth rates (in constant prices) 2001-Q4 2010
- Consumer prices
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- Figure 66: Europe top 7: Consumer prices, 2001-Jan 2011
- Unemployment
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- Figure 67: Europe top 7: Average rate of unemployment, 2001-10
- Interest rates
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- Figure 68: UK and Eurozone: Interest rates, 2004-Q4 2010
- Consumer confidence
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- Figure 69: Europe top 6: Consumer confidence, April 2009-December 2010
Appendix – Which Department Store They Shop
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- Figure 70: Most popular department stores bought from in last six months, by demographics, January 2011
- Figure 71: Next most popular department stores bought from in last six months, by demographics, January 2011
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- Figure 72: Repertoire of department stores bought from in last six months, by demographics, January 2011
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Appendix – The Department Store Shopper Habits
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- Figure 73: Most popular how often they visit and buy from department stores, by demographics, January 2011
- Figure 74: Next most popular how often they visit and buy from department stores, by demographics, January 2011
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Appendix – Attitudes to Department Store Shopping
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- Figure 75: Most popular attitudes towards department store shopping, by demographics, January 2011
- Figure 76: Next most popular attitudes towards department store shopping, by demographics, January 2011
- Target groups
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- Figure 77: Target groups, by demographics, January 2011
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Beale
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- Figure 78: Beale Plc: Sales as share of department store and mixed goods retailers sales in the UK, 2006-10
- Strategic evaluation
- Financial performance
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- Figure 79: Beale Plc: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 80: Beale Plc: Outlet data, 2006-10
- Retail offering
- e-commerce and home shopping
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Debenhams
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- Figure 81: Debenhams: Sales as share of department store and mixed goods retailers sales, 2005-09
- Strategic evaluation
- Overseas franchises increase brand exposure
- Recent history
- Financial performance
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- Figure 82: Debenhams: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 83: Debenhams: UK and Republic of Ireland outlet data, 2006-10
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- Figure 84: Debenhams: International franchise outlet numbers, 2004-Feb 2011
- Figure 85: Debenhams: International franchises – countries of operation, February 2011
- Consumer profile
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- Figure 86: Debenhams shoppers in last six months, by gender, age and socio-economic group, January 2011
- Figure 87: Debenhams shoppers in last six months, by region and ACORN group, January 2011
- Retail offering
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- Figure 88: Debenhams: Own bought product mix, 2006/07 and 2009/10
- e-commerce and home shopping
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- Figure 89: Debenhams: Online profile of unique visitors, three month average to December 2010
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Fenwick Ltd
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- Figure 90: Fenwick Ltd: Sales as share of department store sales in UK, 2005-09
- Strategic evaluation
- Financial performance
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- Figure 91: Fenwick Ltd: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 92: Fenwick Ltd: Outlet data, 2005/06-2009-10
- Retail offering
- e-commerce and home shopping
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Harrods
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- Figure 93: Harrods Ltd: Sales as share of department store retailers’ sales in UK, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 94: Harrods Ltd: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 95: Harrods Ltd: Outlet data, 2005-2009
- Retail offering
- e-commerce and home shopping
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- Figure 96: Harrods.com: Profile of online UK unique visitors, three-month average to December 2010
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Harvey Nichols Group
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- Figure 97: Harvey Nichols Group Ltd: Sales as share of department store and mixed goods retailers sales in UK, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 98: Harvey Nichols Group Ltd: UK and Ireland retail financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 99: Harvey Nichols Ltd: Total domestic versus overseas retail floorspace, 2000-12
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- Note: 2011 and 2012 projected based on planned store openings.
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- Figure 100: Harvey Nichols Group Ltd: UK and Ireland outlet data, 2005/06-2009/10
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- Figure 101: Harvey Nichols Group Ltd: Group outlet data, February 2011
- Retail offering
- e-commerce and home shopping
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- Figure 102: Harveynichols.com: Profile of unique visitors, three-month average to December 2010
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House of Fraser
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- Figure 103: House of Fraser: Sales as share of department store and mixed goods retailers sales in the UK, 2005-09
- Strategic evaluation
- Online and multi-channel
- Recent history
- Financial performance
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- Figure 104: House of Fraser: Group financial performance, 2007/08-2009/10
- Store portfolio
- Consumer profile
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- Figure 105: House of Fraser shoppers in last six months, by gender, age and socio-economic group, January 2011
- Figure 106: House of Fraser shoppers in last six months, by region and ACORN group, January 2011
- Retail offering
- e-commerce and home shopping
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- Figure 107: House of Fraser.co.uk: Profile of unique visitors, three-month average to December 2010
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John Lewis
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- Figure 108: John Lewis Plc: Sales as share of department store and mixed goods retailers sales in UK, 2005-09
- Strategic evaluation
- Financial performance
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- Figure 109: John Lewis Plc: Group financial performance, 2005/06-2009/10
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- Figure 110: John Lewis Plc: Half year to end July 2009 and 2010
- Store portfolio
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- Figure 111: John Lewis Plc: Outlet data, 2005/06-2009/10
- Consumer profile
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- Figure 112: John Lewis shoppers in last six months, by gender, age and socio-economic group, January 2011
- Figure 113: John Lewis shoppers in last six months, by region and ACORN group, January 2011
- Retail offering
- e-commerce and home shopping
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- Figure 114: John Lewis: Online profile of unique visitors, three month average to December 2010
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Marks & Spencer (M&S)
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- Figure 115: Marks & Spencer: Non-food sales as share of UK department store and mixed goods retailers sales, 2005-09
- Strategic evaluation
- Recent history
- Financial performance
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- Figure 116: Marks & Spencer: Group financial performance, 2005/06-2009/10
- Store portfolio
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- Figure 117: Marks & Spencer: Outlet data, 2005/06-2009/10
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- Figure 118: M&S: UK Outlets not specialising in food, by type, 2008-10
- Consumer profile
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- Figure 119: Marks & Spencer UK: Consumer profile – demographics, 2010
- Figure 120: Marks & Spencer UK: Consumer profile – location, 2010
- Figure 121: Marks & Spencer UK: Consumer profile – ACORN group, 2010
- Retail offering
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- Figure 122: Marks & Spencer: own brand portfolio, 2011
- e-commerce and home shopping
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- Figure 123: M&S: M&S Direct sales, 2006/07-2009/10
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- Figure 124: M&S: Online profile of unique visitors, three month average to December 2010
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Selfridges Retail Ltd
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- Figure 125: Selfridges Retail Ltd: Sales as share of department store and mixed goods retailers sales in the UK, 2005-09
- Strategic evaluation
- Financial performance
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- Figure 126: Selfridges Retail Ltd: Group financial performance, 2005-09
- Store portfolio
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- Figure 127: Selfridges Retail Ltd: Outlet data, 2005-09
- Consumer profile
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- Figure 128: Selfridges: Consumer profile – demographics, 2010
- Figure 129: Selfridges: Consumer profile – location, 2010
- Figure 130: Selfridges: Consumer profile – ACORN group, 2010
- Retail offering
- e-commerce and home shopping
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- Figure 131: Selfridges: Online profile of unique visitors, three month average to December 2010
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TJ Hughes
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- Figure 132: TJ Hughes Plc: Sales as share of department store and mixed goods retailers sales in UK, 2005-09
- Strategic evaluation
- Financial performance
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- Figure 133: TJ Hughes Plc: Group financial performance, 2005-09
- Store portfolio
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- Figure 134: TJ Hughes Ltd: Geographical location of outlets, January 2011
- Figure 135: TJ Hughes Ltd: Outlet data, 2005-10
- Consumer profile
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- Figure 136: TJ Hughes: Consumer profile – demographics, 2010
- Figure 137: TJ Hughes: Consumer profile – location, 2010
- Figure 138: TJ Hughes: Consumer profile – ACORN group, 2010
- Retail offering
- e-commerce and home shopping
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- Figure 139: TJ Hughes: Online profile of unique visitors, three month average to December 2010
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