Table of Contents
Executive Summary
-
- The market
- Growth slows in 2015
-
- Figure 1: Best and worst case forecast for department stores sales, 2010-20
- Consumer background unhelpful
- Companies, brands and innovation
- John Lewis leading the sector
- M&S bringing up the rear
-
- Figure 2: Top department stores’ market shares, 2014 and 2015
- John Lewis vs M&S
- The future of all department stores rests on integrating their online and in-store operations
-
- Figure 3: Online share of leading department stores sales, 2013-15
- Space allocation
-
- Figure 4: Department stores: Summary space allocation, March 2016
- Retail product mix
-
- Figure 5: Leading Department Stores: Estimated share of sales by broad product category, 2015/16
- Brands
-
- Figure 6: Attitudes towards and usage of selected brands, November and December 2015
- The consumer
- M&S drops in popularity among women
-
- Figure 7: Department stores purchased from in the last six months, whether in-store or online, February 2016
- John Lewis gets high scores for delivery and returns
-
- Figure 8: Department stores purchased from in the last six months, in-store or online, February 2016
- Customers happy with quality, but scope for improvement in availability of sizes and fashionable clothing ranges
-
- Figure 9: Satisfaction with last purchase from a department store, by different factors, February 2016
- M&S no longer seen as value for money
-
- Figure 10: Overall satisfaction with last department store shopped at, February 2016
- What would encourage shoppers to spend more?
-
- Figure 11: What would encourage consumers to shop more at a department store, February 2016
- Is it worth paying extra for anything?
-
- Figure 12: Willingness to pay extra for specific delivery options when shopping online at department stores, February 2016
- Interest in innovations
-
- Figure 13: Interest in innovations when shopping at department stores, February 2016
- What we think
Issues and Insights
-
- How have department stores performed over the last year?
- The facts
- The implications
- What are the main growth opportunities for department stores?
- The facts
- The implications
- How are department stores competing in a multichannel world?
- The facts
- The implications
The Market – What You Need to Know
-
- Department store sales £15.4 billion, with modest growth expected.
- Most product sectors performing well
- Ageing population
- Consumer confidence holding up well
- Tourism boost
Sector Size and Forecast
-
- Definitions
- Growth slows in 2015
-
- Figure 14: Department stores: sector sales, 2011-15
- Outlook
-
- Figure 15: Best and worst case forecast for department stores sales, 2010-20
- Forecast – The data and methodology
-
- Figure 16: Department store sales in current and constant prices, 2010-20
- Methodology
Consumer Spending
-
-
- Figure 17: Consumer spending on key department store categories, 2011-15
-
Market Drivers
-
- Aging population
-
- Figure 18: Trends in the age structure of the UK population, 2010-20
- Consumers remain cautious, but high earners prosper
- Leisure activities prioritised over retail spend
- Visitors to the UK on the rise
-
- Figure 19: Overseas residents’ visits to the UK, by area of residence, 2014 and 2015
Key Players – What You Need To Know
-
- Creating exciting places to shop
- Fortnum & Mason the top performer
- M&S bringing up the rear
- John Lewis vs M&S
- The future of all department stores rests on integrating their online and in-store operations
- Space allocation
- Retail product mix
Launch Activity and Innovations
-
- John Lewis invests £35 million in new Birmingham store
-
- Figure 20: John Lewis’ new store in Grand Central, Birmingham
- New ‘department-less’ concept
- Selfridges launches Body Studio
-
- Figure 21: Selfridges’ new Body Studio department, April 2016
- Harrods dedicates October to menswear
- Harvey Nichols’ beauty launches
- Department stores expand dining experiences
- New boutique department store for Sheffield
Advertising and Marketing Activity
-
- Leading department stores cut back on advertising spend
- Leading department stores’ advertising spending
-
- Figure 22: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading department stores, 2012-15
- Television is now the favoured media type
-
- Figure 23: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading department stores, by media type, 2015
- Campaign highlights in 2015
- A note on adspend
Leading Specialist Retailers
-
- High-end department stores suffer slowdown
-
- Figure 24: Annual segment growth: Mid-market versus high-end, 2011-15
-
- Figure 25: Major retailers’ annual sales growth (some estimated) versus average segment growth, 2015
- Leading retailers by sales
-
- Figure 26: Leading department stores: Net revenues, 2011-15
- Consolidated sales versus gross transactional values
- Store numbers
-
- Figure 27: Leading department stores: Outlet numbers, 2011-15
- Sales per store
-
- Figure 28: Leading department stores: Annual sales per outlet, 2011-15
- Total sales area
-
- Figure 29: Leading department stores: Total sales area, 2011-15
- Sales densities
-
- Figure 30: Leading department stores: Annual sales per sq m, 2011-15
- Operating profits and margins
-
- Figure 31: Leading department stores: Operating profits, 2011-15
-
- Figure 32: Leading department stores: Operating margins, 2011-15
Market Shares
-
- John Lewis leading the sector
- M&S bringing up the rear
-
- Figure 33: Top department stores’ market shares, 2014 and 2015
- John Lewis vs M&S
- House of Fraser strong recovery
-
- Figure 34: Leading department stores’ market shares, 2011-15
Online
-
- Leading retailers’ online sales
-
- Figure 35: Leading department stores, estimated online sales, 2012-15
- Figure 36: Online share of leading department stores sales, 2013-15
-
- Figure 37: Department store sales, 2012-15
- Click-and-collect
Space Allocation Summary
-
- Overview
-
- Figure 38: Department stores: Summary space allocation, March 2016
- Detailed space allocation
- House of Fraser refurbished beauty halls
- Debenhams introduces more third-party clothing concessions and eateries
- Selfridges welcomes The Conran Shop
- John Lewis’ in-store home hub
- Food occupies a quarter of M&S in-store space
-
- Figure 39: Department stores: Detailed space allocation, March 2016
Retail Product Mix
-
-
- Figure 40: Estimated Space Allocation of Broad Department Stores Product Categories, 2015
-
- Figure 41: Leading Department Stores: Estimated sales by broad product category, 2015/16
- Figure 42: Leading Department Stores: Estimated share of sales by broad product category, 2015/16
-
- Figure 43: Leading Department Stores: Estimated sales density by broad product category, 2015/16
-
Brand Research
-
- What you need to know
- Brand map
-
- Figure 44: Attitudes towards and usage of selected brands, November and December 2015
- Key brand metrics
-
- Figure 45: Key metrics for selected brands, November and December 2015
- Brand attitudes: Marks & Spencer is highly trusted
-
- Figure 46: Attitudes, by brand, November and December 2015
- Brand personality: Harrods boasts the most exclusive image
-
- Figure 47: Brand personality – Macro image, November and December 2015
- Brand personality: Selfridges seen as cutting-edge, yet expensive
-
- Figure 48: Brand personality – Micro image, November and December 2015
- Brand analysis
- John Lewis is highly regarded by consumers
-
- Figure 49: User profile of John Lewis, November 2015
- Harrods the most differentiated department store
-
- Figure 50: User profile of Harrods, December 2015
- Selfridges is a fun brand, but could do with customer service improvements
-
- Figure 51: User profile of Selfridges, December 2015
- Marks & Spencer enjoys a position of strength
-
- Figure 52: User profile of Marks & Spencer, November 2015
- House of Fraser’s online service is an area of strength
-
- Figure 53: User profile of House of Fraser, December 2015
- Debenhams associated with accessibility, but store experience is lacking
-
- Figure 54: User profile of Debenhams, November 2015
The Consumer – What You Need to Know
-
- M&S drops in popularity among women
- John Lewis gets high scores for delivery and returns
- M&S no longer seen as value for money
- Own-brands are main draw
- Creating a leisure and retail destination
- Most demand for same-day delivery charges
- Millennials most drawn to innovations
Where They Shop
-
- M&S drops in popularity among women
-
- Figure 55: Department stores purchased from in the last six months, whether in-store or online, February 2016
-
- Figure 56: Department stores purchased from in the last six months, whether in-store or online, February 2015 and 2016
- John Lewis remains most popular online
-
- Figure 57: Department stores purchased from in the last six months, in-store or online, February 2016
- Debenhams draws more young women
- Where consumers browse
-
- Figure 58: Department stores where consumers have browsed in the last six months, either in-store or online, February 2016
Satisfaction with Department Stores
-
- Customers happy with quality, but scope for improvement in availability of sizes and fashionable clothing ranges
-
- Figure 59: Satisfaction with last purchase from a department store, by different factors, February 2016
- Key driver analysis
-
- Figure 60: Key drivers of overall satisfaction with department store last shopped at, February 2016
-
- Figure 61: Overall satisfaction with department store last shopped at - key driver output, February 2016
- How the department stores compare
-
- Figure 62: Overall satisfaction with last department store shopped at, February 2016
- How they perform on pricing and quality
-
- Figure 63: Satisfaction with value for money, by department store last shopped at, February 2016
-
- Figure 64: Satisfaction with product quality, by department store last shopped at, February 2016
- Figure 65: Satisfaction with promotions/offers, by department store last shopped at, February 2016
- How retailers score on fashionability and new product launches
-
- Figure 66: Satisfaction with fashionable clothing range, by department store last shopped at, February 2016
-
- Figure 67: Satisfaction with new product launches, by department store last shopped at, February 2016
- Figure 68: Satisfaction with new product launches, by department store last shopped at, February 2016
- Delivery, returns and click-and-collect
-
- Figure 69: Satisfaction with delivery services, by department store last shopped at, February 2016
-
- Figure 70: Satisfaction with returns process, by department store last shopped at, February 2016
- Figure 71: Satisfaction with click-and-collect, by department store last shopped at, February 2016
What Would Encourage More Shopping at Department Stores
-
- Own-brands are main draw
-
- Figure 72: What would encourage consumers to shop more at a department store, February 2016
- Creating a leisure and retail destination
Willingness to Pay Extra for Delivery Options
-
- Most demand for same-day delivery charges
-
- Figure 73: Willingness to pay extra for specific delivery options when shopping online at department stores, February 2016
- Unwillingness to pay for click-and-collect
Interest in Innovations
-
- Millennials most drawn to innovations
-
- Figure 74: Interest in innovations when shopping at department stores, February 2016
- A third of under-25s drawn to visual search apps
Debenhams
-
- What we think
- Bolstered multichannel capabilities
- First price right price strategy
- Reduction in stock levels across weather-sensitive categories, particularly clothing
- Renting out under-used shop space
- Enhanced customer service programme
- Injecting fresh talent into its Designers at Debenhams and other own brands
- Partners’ local market expertise driving international expansion
- Company background
- Company performance
-
- Figure 75: Debenhams: Group financial performance, 2010/11-2014/15
-
- Figure 76: Debenhams: Outlet data, 2010/11-2014/15
- Retail offering
Fenwick
-
- What we think
- Shutters e-commerce site
- Store investment attracting new brands
- More store events
- Early house beauty service
- Company background
- Company performance
-
- Figure 77: Fenwick Ltd: Group financial performance, 2010/11-2015/16
-
- Figure 78: Fenwick Ltd: Outlet data, 2010/11-201/16
- Retail offering
Harrods
-
- What we think
- Influential MD stepping down
- New Chinese visitor visa law boost
- Reaching out to affluent consumers
- New Mini Superbrands concept
- Company background
- Company performance
-
- Figure 79: Harrods Ltd: Group financial performance, 2010/11-2014/15
- Figure 80: Harrods Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Harvey Nichols UK
-
- What we think
- Expanding online delivery coverage
- A differentiated and compelling store proposition
- Loyalty card app
- Company background
- Company performance
-
- Figure 81: Harvey Nichols UK: Group financial performance, 2010/11-2014/15
-
- Figure 82: Harvey Nichols UK: Outlet data, 2010/11-2014/15
- Retail offering
House of Fraser Plc
-
- What we think
- Refurbished stores driving bricks-and-mortar like-for-like sales growth
- Multichannel investment boosts online sales growth
- Bricks-and-mortar overseas expansion
- Profitable own brand offering
- Company background
- Company performance
-
- Figure 83: House of Fraser Plc: Group financial performance, 2010/11-2014/15
-
- Figure 84: House of Fraser Plc: Outlet data, 2010/11-2014/15
- Retail offering
John Lewis
-
- What we think
- Transforming the in-store experience
- UK store expansion
- Risk-averse approach to overseas opportunities
- E-commerce international expansion
- Digital shopping experience driving sales through mobile devices
- Fashion credentials
- Company background
- Company performance
-
- Figure 85: John Lewis Plc (department store): Group financial performance, 2011/12-2015/16
-
- Figure 86: John Lewis Plc (department store): UK outlet data, 2011/12-2015/16
- Retail offering
Marks & Spencer
-
- What we think
- New chief executive to breathe new life into M&S’ fashion range
- New beauty ambassador and revamped beauty halls
- New loyalty scheme launched
- Working on improving the store experience
- Expanding click-and-collect options
- Company background
- Company performance
-
- Figure 87: Marks & Spencer: Group financial performance, 2010/11-2014/15
- Figure 88: Marks & Spencer: Outlet data, 2010/11-2014/15
-
- Figure 89: Marks & Spencer: Store portfolio, September 2015
- Retail offering
Selfridges Retail
-
- What we think
- 37,000 sq ft Body Studio
- Personalised shopping experience
- Shopping can and should be about more than just price or convenience
- Enhanced multichannel capabilities
- Company background
- Company performance
-
- Figure 90: Selfridges Retail Ltd: Group financial performance, 2010/11-2014/15
-
- Figure 91: Selfridges Retail Ltd: Outlet data, 2010/11-2014/15
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Forecast methodology
- Sector benchmarks
- Department stores
- Mixed goods retailers
- Statutory revenues versus GTV
- Financial definitions
- Sales per store, sales per sq m
- Key Driver Analysis
- Interpretation of results
-
- Figure 92: Overall satisfaction with last department store shopped at - key driver output, February 2016
-
- Figure 93: Satisfaction with department store shopped at last, February 2016
- Abbreviations
Back to top