Department Stores - UK - 2021

OVERVIEW
Key issues covered in this Report
COVID-19: Market context
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on department stores
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
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
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
Figure 4: Attitudes towards and usage of selected brands, 2020-21
The consumer
Big decline in department store usage
Figure 5: Department stores used in the last 12 months, May 2019-May 2021
27% shop via a smartphone
Figure 6: How shoppers have bought from department stores in the past 12 months, May 2021
Big decline in purchasing of key fashion category
Figure 7: What consumers bought from department stores in February 2021 and May 2021
Range of brands/products entice shoppers
Figure 8: How satisfied shoppers are with department stores, May 2021
25% use social media for help
Figure 9: Current and future behaviours, May 2021
Department stores should collaborate with local brands
Figure 10: Consumers interest in innovations, May 2021
Pureplays steal spend from shoppers
Figure 11: Reasons for not shopping at department stores, May 2021
ISSUES AND INSIGHTS
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
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
Short, medium and long-term impact on department stores
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
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
Figure 15: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 1 July 2021)
Forecast methodology
CONSUMER SPENDING
COVID-19 causes declines across all categories
Reliance on fashion leads to losses
Home and garden emerges as one of the strongest categories
Figure 16: Consumer spending on the core department store categories, 2016-20
MARKET DRIVERS
Tourism
Figure 17: Number of inbound tourists and tourist expenditure in the UK, 2009-20
Brexit fears
Figure 18: Brexit fears, 29 April-6 May 2021
Footfall will be slow to recover
Figure 19: Google COVID-19 Community Mobility Reports, UK (national), average monthly change, 15 February 2020-30 April 2021
Online sales
Figure 20: Internet sales as a proportion of total retail sales, 2010-20
COMPANIES AND BRANDS – KEY TAKEAWAYS
John Lewis grows its share
Debenhams moves fully online after acquisition by boohoo
Online sales soar as stores close
LEADING PLAYERS
Note on department store sales
Debenhams bought by boohoo, and M&S makes changes
Figure 21: Leading department stores, net sales, 2016-20
Frasers Group focuses on premium offerings
Beales comes back after administration
Figure 22: Leading department stores, outlet numbers, 2016-20
John Lewis shutters stores as it suffers losses and focuses on online
Figure 23: Leading department stores, operating profits, 2016-20
Figure 24: Leading department stores, estimated sales per outlet, 2016-20
MARKET SHARE
John Lewis grows its share, while Debenhams’ declines
Figure 25: Leading department stores, estimated market shares, 2018-20
Figure 26: Leading department stores, market shares, 2016-20
ONLINE
Online sales soar as stores close
Figure 27: Select leading department stores, estimated online revenues, 2016-20
Online sales now make up three quarters of all John Lewis revenue
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
Department stores focus on in-store experiences
Harrods opens beauty concept store at Intu Lakeside
Figure 30: H Beauty store in Milton Keynes 2021
Selfridges teams up with SoulCycle to open first Outside Studio
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
Figure 32: John Lewis AR sofa feature 2020
Retailers focus on expanding ecommerce capabilities
John Lewis teams up with furniture rental service Fat Llama
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
Figure 34: Fortnum & Mason podcast 2020
Selfridges to sell vertically farmed produce from its own store
Figure 35: Project Earth food edit 2020
Launches
House of Fraser launches ‘staying in-in’ collection
Figure 36: House of Fraser’s In-In Collection 2020
Harrods opens outlet at Westfield to help shift excess stock
Figure 37: Harrods outlet at Westfield London
John Lewis reveals own-brand label AnyDay
Figure 38: John Lewis AnyDay range 2021
ADVERTISING AND MARKETING ACTIVITY
Ad spending significantly drops in 2020
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
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
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
Figure 43: Waitrose & Partners Christmas advert, 2020
Figure 44: A Very British Bear advert 2020
Figure 45: M&S Christmas advert 2020
Selfridges launches Project Earth campaign
Figure 46: Selfridges Project earth campaign 2020
M&S ‘Remarksable’ campaign
Figure 47: M&S Remarksable campaign 2020
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 48: Attitudes towards and usage of selected brands, 2020-21
Key brand metrics
Figure 49: Key metrics for selected brands, 2020-21
Brand attitudes: Selfridges provides a great online service
Figure 50: Attitudes, by brand, 2020-21
Brand personality: Liberty perceived as fun
Figure 51: Brand personality – Macro image, 2020-21
John Lewis seen as responsive
Figure 52: Brand personality – Micro image, 2020-21
Brand analysis
Selfridges perceived as fun
Figure 53: User profile of Selfridges, 2021
Liberty needs to do more to raise brand awareness
Figure 54: User profile of Liberty, 2021
John Lewis & Partners is a favourite brand
Figure 55: User profile of John Lewis & Partners, 2020
Harrods seen as diverse
Figure 56: User profile of Harrods, 2021
House of Fraser needs to do more to stand out
Figure 57: User profile of House of Fraser, 2021
Reading word clouds
THE CONSUMER – KEY TAKEAWAYS
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
Consumers shop more online
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
Figure 59: Activities done in the last week by consumers, 10-18 June 2021
Shoppers spend less on clothing and accessories
Figure 60: Consumers’ shopping habits due to COVID-19, 10-18 June 2021
WHERE THEY SHOP
Big decline in department store usage
Figure 61: Department stores used in the last 12 months, May 2019-May 2021
John Lewis’s focus on ecommerce capabilities pays off
Figure 62: Department stores used in-store and online in the last 12 months, May 2021
16-34s keen department store shoppers
Figure 63: Who buys from department stores, by age group, May 2021
ABs favour department stores
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
Figure 65: Repertoire of how many department stores they shop at, May 2021
HOW THEY SHOP
27% shop via a smartphone
Figure 66: How shoppers have bought from department stores in the past 12 months, May 2021
16-34s favour shopping via a smartphone
Figure 67: How shoppers have bought from department stores in the past 12 months, May 2021
WHAT THEY BUY
Big decline in purchasing of key fashion category
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
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
Figure 70: Repertoire of what they buy, May 2021
SATISFACTION WITH DEPARTMENT STORES
Range of brands/products entice shoppers
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
Figure 72: How satisfied shoppers are with department stores online services, by age group, May 2021
Shoppers engage with store environments
Figure 73: How satisfied shoppers are with department stores’ store environments, by age group, May 2021
CURRENT AND FUTURE BEHAVIOUR OF DEPARTMENT STORE SHOPPERS 
Adapting click-and-collect
Figure 74: Current and future behaviours, May 2021
16-34s use social media for help
Figure 75: Current and future behaviours, by age group, May 2021
Males interested in attending an online event
Figure 76: Consumers who would be interested in the following, by gender, May 2021
INTEREST IN IN-STORE INNOVATIONS 
Contactless shopping appeals to shoppers
Figure 77: Consumers interest in innovations, May 2021
Repair stations appeal to a quarter of shoppers
Department stores should collaborate with local brands
Figure 78: Consumers interest in innovations, by age group, May 2021
REASONS FOR NOT SHOPPING AT DEPARTMENT STORES
Online-only retailers steal spend from shoppers
Figure 79: Reasons for not shopping at department stores, May 2021
Shoppers cut back on discretionary spending
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 80: UK department store sector size and forecast, best and worst-case scenario, 2016-26, prepared on 1 July 2021