Table of Contents
Executive Summary
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- The market
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- Figure 1: Best- and worst-case forecast for department store sales, 2009-19
- Market factors
- Consumer spending
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- Figure 2: Consumer spending on core department store categories, 2009-14
- Foreign visitors
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- Figure 3: Overseas residents’ visits to the UK, by area of residence, 2013 and 2014
- Companies, brands and innovation
- Market shares
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- Figure 4: Top department stores’ market shares, 2013 and 2014
- Winners and losers
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- Figure 5: Major retailers’ annual sales growth (some estimated) versus average segment growth, 2014
- Brand research
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- Figure 6: Attitudes towards and usage of selected brands, November 2014 and February 2015
- Major innovations
- Space allocation
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- Figure 7: Department stores: Summary space allocation, February 2015
- Online growth
- The consumer
- Where they shop
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- Figure 8: Department stores purchased from in the last six months, in-store and online, February 2015
- What would encourage them to shop more?
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- Figure 9: What would encourage consumers to shop more at a department store, February 2015
- Interest in additional services
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- Figure 10: Interest in additional services when shopping at department stores, February 2015
- Reasons for shopping at a particular department store
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- Figure 11: Reasons for shopping in-store at a particular department store, February 2015
- Shopping in the lead-up to Christmas
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- Figure 12: Shopping behaviour at department stores in the lead-up to Christmas, February 2015
- What we think
Issues and Insights
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- How have department stores performed over the last year?
- The facts
- The implications
- How are department stores competing in a multichannel world?
- The facts
- The implications
- What are the main growth opportunities for department stores?
- The facts
- The implications
Trend Application
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- Trend: Experience is All
- Trend: Access All Areas
- Trend: Return to the Experts
Market Environment
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- Key points
- Foreign visits
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- Figure 13: Overseas residents’ visits to the UK, by area of residence, 2013 and 2014
- Changing population structure
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- Figure 14: Trends in the age structure of the UK population, 2009-19
- Consumer confidence falls during 2014
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- Figure 15: Financial confidence index, January 2009- January 2015
- Closing gap between prices and wages
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- Figure 16: Retail prices index and average weekly earnings: Annual % change, January 2011-January 2015
Consumer Spending on Department Store Categories
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- Key points
- Core department store categories
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- Figure 17: Consumer spending on core department store categories, 2009-14
- Full spending breakdown
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- Figure 18: Consumer spending on department store categories (incl. VAT), 2009-14
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Setting the standard for fragrance retailing
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- Figure 19: Harrods Salon De Parfums
- Selfridges #beautyproject
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- Figure 20: ‘He She Me’: A display from Selfridges’ Agender department
- Social selling strategy
- John Lewis invests in technology
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- Figure 21: Beacon technology: Store staff being alerted of a click-and-collect customer entering the store
- Memory mirror
- Harrods goes healthy
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- Figure 22: Harrods’ Happy New You window display, January 2015
- In-store cinema
Sector Size and Forecast
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- Key points
- Department store sales grow 2.2% in 2014
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- Figure 23: Department store sales. 2010-14
- Market size
- The future
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- Figure 24: Best- and worst-case forecast for department store sales, 2009-19
- Forecast
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- Figure 25: Best- and worst-case forecast for department store sales (inc VAT), 2009-19
Space Allocation Summary
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- Key points
- Space allocation overview
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- Figure 26: Department stores: Summary space allocation, February 2015
- Detailed space allocation
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- Figure 27: Department stores: Detailed space allocation, February 2015
Retail Product Mix
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- Key points
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- Figure 28: Estimated space allocation of broad department stores product categories, 2013/14
- Figure 29: Leading department stores: Estimated sales by broad product category, 2013/14
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- Figure 30: Leading department stores: Estimated share of sales by broad product category, 2013/14
- Figure 31: Leading department stores, estimated sales density by product, 2013/14
Leading Retailers
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- Key points
- High-end department stores outperform
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- Figure 32: Annual segment growth: Mid-market versus high-end, 2011-14
- Figure 33: Major retailers’ annual sales growth (some estimated) versus average segment growth, 2014
- Consolidated sales versus gross transactional values
- Leading retailers by sales
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- Figure 34: Leading department stores: Net revenues, 2010-14
- Store numbers
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- Figure 35: Leading department stores: Outlet numbers, 2010-14
- Sales per store
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- Figure 36: Leading department stores: Annual sales per outlet, 2010-14
- Total sales area
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- Figure 37: Leading department stores: Total sales area, 2010-14
- Sales densities
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- Figure 38: Leading department stores: Annual sales per sq m, 2010-14
- Operating profits and margins
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- Figure 39: Leading department stores: Operating profits, 2010-14
- Figure 40: Leading department stores: Operating margins, 2010-14
Market Shares
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- Key points
- M&S loses share, while John Lewis gains
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- Figure 41: Top department stores’ market shares, 2013 and 2014
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- Figure 42: Leading department stores’ market shares, 2010-14
Online
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- Key points
- Online sector sales grow 14%
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- Figure 43: Estimated online sales by department stores (incl. VAT), 2012-14
- Key category sales online
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- Figure 44: Online as a proportion of spending on selected categories, 2014 and 2015
- John Lewis reaches £1.2 billion online sales
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- Figure 45: Leading department stores’ online sales (excl. VAT), 2012-14
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- Figure 46: Leading department stores’ online sales as % of their total sales, 2012-14
- Online market shares
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- Figure 47: Leading department stores’ shares of all online sales, 2012-14
- Most popular sites by visitor numbers
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- Figure 48: Leading department stores’ online visitor data, March 2015
- Visits to websites by age
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- Figure 49: Proportion of visits to department store websites, by age, 1 February- 28 February 2015
Brand Communication and Promotion
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- Key points
- Leading department stores’ advertising spend
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- Figure 50: Leading department store retailers’ main media advertising spend, 2011-14
- Press advertising is favoured
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- Figure 51: Leading department store retailers’ main media advertising spend, by media type, 2014
- Figure 52: Leading department store retailers’ main media advertising spend, by media type, 2014
- Campaign highlights in 2014
Brand Research – Department Stores
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- What you need to know
- Brand map
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- Figure 53: Attitudes towards and usage of selected brands, November 2014 and February 2015
- Key brand metrics
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- Figure 54: Key metrics for selected brands, November 2014 and February 2015
- Brand attitudes: House of Fraser most likely to attract customers on price
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- Figure 55: Attitudes, by brand, November 2014 and February 2015
- Brand personality: Harrods’ unique proposition is considered an exclusive one
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- Figure 56: Brand personality – macro image, November 2014 and February 2015
- Selfridges and John Lewis most likely to be seen as fashionable
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- Figure 57: Brand personality – micro image, November 2014 and February 2015
- Brand analysis
- John Lewis combines style with customer service and trust
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- Figure 58: User profile of John Lewis, November 2014
- Marks & Spencer has greater accessibility than other department stores
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- Figure 59: User profile of Marks & Spencer, November 2014
- Selfridges has a vibrant sense of innovation
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- Figure 60: User profile of Selfridges, February 2015
- House of Fraser most likely to be associated with value
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- Figure 61: User profile of House of Fraser, February 2015
- Harrods benefits from very unique brand image
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- Figure 62: User profile of Harrods, February 2015
- Debenhams may be a choice of convenience
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- Figure 63: User profile of Debenhams, November 2014
The Consumer – Where They Shop
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- Key points
- What we asked
- M&S leads but with an ageing customer
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- Figure 64: Department stores purchased from in the last six months, whether in-store or online, February 2015*
- John Lewis grows in popularity among men
- Debenhams is biased towards women
- Where consumers purchase – online/in-store split
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- Figure 65: Department stores purchased from in the last six months, in-store and online, February 2015
- Purchasing online by demographic group
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- Figure 66: Department stores purchased from in the last six months, online, by gender, age and socio-economic group, February 2015
- House of Fraser
- High-end and luxury department stores
- Where consumers browse
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- Figure 67: Department stores where consumers have browsed in the last six months, either in-store or online, February 2015
- Most shop at one department store only
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- Figure 68: Repertoire of department stores purchased from in-store in the last six months, February 2015
The Consumer – What Would Encourage Them to Shop More at Department Stores?
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- Key points
- What we asked
- Demand for more retailers to offer price matching
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- Figure 69: What would encourage consumers to shop more at a department store, February 2015
- Women continue to want generous loyalty schemes
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- Figure 70: What would encourage consumers to shop more at a department store, by age, February 2015
- Women want clothes that flatter
- Young want updated clothes ranges
- More payment options
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- Figure 71: What would encourage consumers to shop more at a department store, by age, February 2015
- Young keen on virtual fittings rooms
- Mobile apps
- Delivery versus click-and-collect
The Consumer – Interest in Additional Services
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- Key points
- What we asked
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- Figure 72: Interest in additional services when shopping at department stores, February 2015
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- Figure 73: Interest in additional services when shopping at department stores, by gender, February 2015
- Focusing on new beauty treatments
- Interest in opticians and other services
The Consumer – Reasons for Shopping In-Store and Online at a Particular Department Store
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- Key points
- What we asked
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- Figure 74: Reasons for shopping in-store at a particular department store, February 2015
- Reasons for shopping at particular department stores
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- Figure 75: John Lewis: Reasons for shopping in-store at a particular department store relative to department store average, February 2015
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- Figure 76: M&S: Reasons for shopping in-store at a particular department store relative to department store average, February 2015
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- Figure 77: House of Fraser: Reasons for shopping in-store at a particular department store relative to department store average, February 2015
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- Figure 78: Debenhams: Reasons for shopping in-store at a particular department store relative to department store average, February 2015
- Reasons for shopping online at a particular department store
- What we asked
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- Figure 79: Reasons for shopping online at a particular department store, February 2015
The Consumer – Shopping at a Department Store in the Lead-up to Christmas
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- Key points
- What we asked
- A promotional Christmas 2014
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- Figure 80: Shopping behaviour at department stores in the lead-up to Christmas, February 2015
- Black Friday hype
- An online Christmas
Debenhams
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- What we think
- Becoming less promotionally driven
- Catching up on multichannel
- Looking internationally for growth…
- …as UK reaches saturation
- Company background
- Company performance
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- Figure 81: Debenhams: Group financial performance, 2009/10-2013/14
- Latest financial results – 19 weeks to 10 January 2015
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- Figure 82: Debenhams: Outlet data, 2009/10-2013/14
- Retail offering
Fenwick
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- What we think
- Company background
- Company performance
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- Figure 83: Fenwick Ltd: Group financial performance, 2009/10-2014/15
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- Figure 84: Fenwick Ltd: Outlet data, 2009/10-2014/15
- Retail offering
Harrods
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- What we think
- Company background
- Company performance
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- Figure 85: Harrods Ltd: Group financial performance, 2009/10-2014/15
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- Figure 86: Harrods Ltd: Outlet data, 2009/10-2014/15
- Retail offering
Harvey Nichols UK
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- What we think
- All change in the management team
- Focusing on overseas development
- Strengthening the e-commerce offer
- Company background
- Company performance
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- Figure 87: Harvey Nichols UK: Group financial performance, 2009/10-2014/15
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- Figure 88: Harvey Nichols UK: Outlet data, 2009/10-2014/15
- Retail offering
House of Fraser
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- What we think
- A new phase
- Strong performance as multichannel, own-brands and innovation fuels growth…
- …but still making a loss
- Company background
- Company performance
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- Figure 89: House of Fraser: Financial performance, 2009/10-2014/15
- Stores
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- Figure 90: House of Fraser: Outlet data, 2010/11-2014/15
- Retail offering
John Lewis
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- What we think
- One of retail’s winners
- Innovative, especially in omni-channel
- Strong store presence with pipeline of stores
- Well placed for future growth
- Company background
- Company performance
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- Figure 91: John Lewis: Department store financial performance, 2009/10-2014/15
- First half and Christmas 2014/15
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- Figure 92: John Lewis: department stores outlet data, 2009/10-2014/15
- Retail offering
Marks & Spencer
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- What we think
- Divergent performance from two distinct halves
- Womenswear is the key
- Online also a problem
- Keeping things in perspective
- Company background
- Company performance
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- Figure 93: Marks & Spencer: Group financial performance, 2009/10-2014/15
- Figure 94: Marks & Spencer: Group sales breakdown, 2013/14
- Q3 2014/15
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- Figure 95: Marks & Spencer: Outlet data, 2009/10-2013/14
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- Figure 96: Marks & Spencer store portfolio, March 2014
- Retail offering
Selfridges Retail
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- What we think
- Rapid online growth
- Company background
- Company performance
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- Figure 97: Selfridges Retail Ltd: Group financial performance, 2009/10-2014/15
- Figure 98: Selfridges Retail Ltd: Outlet data, 2009/10-2014/15
- Retail offering
Appendix – Market Size and Forecast
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- Figure 99: Best- and worst-case forecast for department store sales, 2014-19
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