Author: Mintel Group Ltd.
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Retail Review - UK - March 2008

ISSUES IN THE MARKET
Technical notes:
INSIGHTS AND OPPORTUNITIES
How good is corporate memory?
Value is about more than low prices
Product centricity
Managing the bottom line
Multichannel mindset
FAST FORWARD TRENDS
 TREND 1: LIFE COACHING
What’s next?
 TREND 2: NO MIDDLEMAN
What’s next?
 TREND 3: CARNIVORE, HERBIVORE...LOCAVORE
What’s next?
MARKET IN BRIEF
 PERFORMANCE REVIEW
Non-food retailers fought back in 2007
Home shopping the major winner in 2007
One-way ticket to Tescoland
Major changes of ownership
Key casualties in 2007/08
 PROSPECTS FOR 2008
Consumer confidence trends show swing to pessimism
Bulk of people occupy the middle ground
Mild pessimism is the most widely held view
 RETAIL CATEGORY WINNERS AND LOSERS
Holidays retain top spot
Debt reduction has increased popularity
Tough year likely for clothing retailers
 CATEGORY REVIEWS
Food and drink retailers
Non-specialised non-food retailers
Clothing retailers and footwear retailers
Clothing retailers
Footwear retailers
Household goods retailers
Furniture and furnishings retailers
Electrical goods retailers
DIY retailers
Specialist non-food retailers
Health and beauty retailers
Booksellers and stationers
Jewellers
Toys and games retailers
Sports goods and outdoor leisure retailers
Miscellaneous non-food specialists
Home shopping retailers
MARKET IN CONTEXT
Key findings
2007 retail sales growth well ahead of 2006
Home shopping the clear winner
Christmas failed to deliver
Better-than-anticipated sales
Indicators remain positive
Careful what you wish for
2008 – no better but likely to be worse
Figure 1: All retail sales, at current and constant prices, 2000-07
Non-food retailers fought back in 2007
Grocers found gains harder to come by in 2007
Household goods retailers hit by deflation, weak demand and increased competition
Home shopping retailers grew fastest
Non-food specialists fought back well in 2007
Booksellers and stationers alone among non-food specialists to have performed badly
Figure 1: Annual change in sales value, by sector, 2004/05-2006/07
Christmas failed to sparkle
Figure 2: Retail sales, monthly change by value, not seasonally adjusted, 2006 and 2007
The pre-Christmas interest rate cut failed to reassure consumers
Home shopping the biggest winner
Household goods retailers struggled badly
Food retailers and non-food specialists gained share
Figure 3: December, year-on-year change in sales value, by sector, 2005/06 and 2006/07
FOOD AND DRINK RETAILERS
Sector structure and key trends
Key developments
Update on Competition Commission report
Company developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 4: Food and drink retailers’ sales, 2003/04-2006/07
Profit trends
Figure 5: Food and drink retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 6: Food and drink retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 7: Outlet numbers operated, by leading food and drink retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Tesco
J Sainsbury
Asda
Morrisons (incorporating Safeway)
Co-operative Group
Somerfield
Marks & Spencer
Waitrose
Iceland
Aldi
Thresher
Netto
Greggs
Farmfoods
Martin McColl
Holland & Barrett
Booths
Thorntons
Majestic Wine
Oddbins
Heron Frozen Foods
Companies with no breakdown of UK retail sales
Lidl
Profile detail:
Companies below the turnover threshold
One to watch
Casualties
Kwik Save
Co-operative Societies
Symbol groups
Other symbol groups
Wholesaler-supported fascias for independents
Forecourt retailers
MIXED GOODS RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Sector opportunities
Key innovation
Sales trends
Figure 8: Mixed goods retailers’ sales, 2003/04-2006/07
Figure 9: Highest three-year sales growth, 2003/04-2006/07
Profit trends
Figure 10: Mixed goods retailers’ operating profits, 2003/04-2006/07
Figure 11: Highest three-year operating profits growth, 2003/04-2006/07
Margin trends
Figure 12: Mixed goods retailers’ operating margins, 2003/04-2006/07
Figure 13: Most profitable mixed goods retailers, by percentage and profit margins, 2003/04-2006/07
Outlet trends
Figure 14: Outlet numbers operated, by leading mixed goods retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Argos
John Lewis Partnership – department stores
Woolworths
Debenhams
Wilkinson
Mothercare, incorporating Early Learning Centre
Early Learning Centre
Harrods
Selfridges
House of Fraser
TJ Morris, trading as Home Bargains
Poundland
Fenwick incorporating Bentalls
Instore
TJ Hughes
Harvey Nichols
CDS (Superstores International) trading as The Range
Robert Dyas
Companies with an incomplete dataset
B&M Retail trading as Bargain Madness
99p Stores Ltd
Companies below the turnover threshold
Ones to watch
Casualty
CLOTHING RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovations
Sales trends
Figure 15: Clothing retailers’ sales, 2003/04-2006/07
Profit trends
Figure 16: Clothing retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 17: Clothing retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 18: Outlet numbers operated, by leading clothing retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Marks & Spencer
Next
Arcadia
Matalan
Primark
Bhs
New Look
TK Maxx
Peacocks
Bonmarché
River Island
Alexon Group
H&M Hennes
Monsoon
Adams Kids
Ethel Austin
Edinburgh Woollen Mill
Mackays
mkone
Zara
Moss Bros
Jacques Vert
Internaçionale
French Connection
Austin Reed/Country Casuals
USC
Robinson Webster trading as Jigsaw and Kew
La Senza
Hobbs
Ann Summers
Fat Face
Jane Norman
Republic
Companies with an incomplete dataset
Ted Baker
Companies with no breakdown of UK retail sales
Gap
Slater
Retail companies below the turnover threshold
Significant wholesale/retail fashion brands
Ones to watch
Casualties
FOOTWEAR RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 19: Footwear retailers’ sales, 2003/04-2006/07
Figure 20: Indexed growth, footwear retailers’ sales, 2003/04-2006/07
Profit trends
Figure 21: Footwear retailers’ operating profits, 2003/04-2006/07
Figure 22: Indexed growth, footwear retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 23: Footwear retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 24: Outlet numbers operated, by leading footwear retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Stylo
Shoe Zone
Stead & Simpson
Shoefayre
Kurt Geiger
Brantano
Schuh
Office
Faith Footwear
Companies with no breakdown of UK retail sales
C&J Clark
The Shoe Studio
Companies below the turnover threshold
Ones to watch
Casualty
FURNITURE, HOMEWARES AND FLOORCOVERINGS RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 25: Furniture, homewares and furnishing retailers’ sales, 2003/04-2006/07
Profit trends
Figure 26: Furniture, homewares and furnishing retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 27: Furniture, homewares and furnishing retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 28: Outlet numbers operated, by leading furniture, homewares and floorcoverings retailers, 2005/06-2007/08
 COMPANY ANALYSIS
IKEA
MFI
DFS
Steinhoff UK Retail (operating as Harveys Furnishings, Bensons for Beds and others)
Carpetright
Dunelm
HomeForm
Allied Carpets
Laura Ashley
ScS
Land of Leather
Furniture Village
Habitat
Dreams
Floors-2-Go
Company with incomplete dataset
Rosebys
Company with no breakdown of UK retail sales
Companies below the turnover threshold
Ones to watch
Casualties
ELECTRICAL RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovations
Sales trends
Figure 29: Electrical retailers’ sales, 2003/04-2006/07
Profit trends
Figure 30: Electrical retailers’ operating profits, 2003/04-2006/07
Figure 31: Electrical retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 32: Outlet numbers operated, by leading electrical retailers, 2005/06-2007/08
 COMPANY ANALYSIS
DSG International plc (formerly Dixons Stores Group)
UK & Ireland Electricals
UK computing
DSG e-commerce division
Comet
Maplin
Richer Sounds
Mobile phone retailers
HARDWARE/DIY RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 33: Hardware/DIY retailers’ sales, 2003/04-2006/07
Profit trends
Figure 34: Hardware/DIY retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 35: Hardware/DIY retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 36: Outlet numbers operated, by leading hardware/DIY retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Kingfisher UK – B&Q and UK Trade
Homebase
Topps Tiles
Brewers
Companies with incomplete dataset
Wickes
Focus DIY
Company below turnover threshold
HEALTH AND BEAUTY RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 37: Health and beauty retailers’ sales, 2003/04-2006/07
Profit trends
Figure 38: Health and beauty retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 39: Health and beauty retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 40: Outlet numbers operated, by leading health and beauty retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Alliance Boots
Lloyds Pharmacy
Superdrug, incorporating Savers Health & Beauty
Superdrug
Savers Health & Beauty
Rowlands
The Co-operative Pharmacy
The Body Shop
The Perfume Shop
Company with incomplete dataset
Companies below the turnover threshold
Ones to watch
BOOKSELLERS AND STATIONERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovations
Sales trends
Figure 41: Booksellers’ and stationers’ sales, 2003/04-2007/08
Profit trends
Figure 42: Booksellers’ and stationers’ operating profits, 2003/04-2007/08
Margin trends
Figure 43: Booksellers’ and stationers’ operating margins, 2003/04-2007/08
Outlet trends
Figure 44: Outlet numbers operated, by leading booksellers and stationers, 2005/06-2007/08
 COMPANY ANALYSIS
WH Smith
Waterstone’s
Clinton Cards
Borders
The Works
Ryman Group (trading as Ryman, Partners the Stationers and Stationery Box)
Blackwell
Company with incomplete dataset
Celebrations Group (formerly Greeting Card Group)
Company with no breakdown of UK retail sales
Staples
Companies below turnover threshold
One to watch
Casualties
JEWELLERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 45: Jewellers’ sales, 2003/04-2006/07
Profit trends
Figure 46: Jewellers’ operating profits, 2003/04-2006/07
Margin trends
Figure 47: Jewellers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 48: Outlet numbers operated, by leading jewellers, 2005/06-2007/08
 COMPANY ANALYSIS
Signet plc
Aurum Holdings (incorporating Goldsmiths, Mappin & Webb and Watches of Switzerland)
Claire’s
Companies below the turnover threshold
Ones to watch
TOYS AND GAMES RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 49: Toys and games retailers’ sales, 2003/04-2006/07
Profit trends
Figure 50: Toys and games retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 51: Toys and games retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 52: Outlet numbers operated, by leading toys and games retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Game
Gamestation
Toys ‘R’ Us
The Disney Store
Companies below the turnover threshold
Ones to watch
Casualties
SPORTS AND OUTDOOR LEISURE RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 53: Sports and outdoor leisure retailers’ sales, 2003/04-2006/07
Profit trends
Figure 54: Sports and outdoor leisure retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 55: Sports and outdoor leisure retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 56: Outlet numbers operated, by leading sports and outdoor leisure retailers, 2005/06-2007/08
 COMPANY ANALYSIS
Sports Direct, formerly Sports World International
JJB Sports
John David Group
Blacks Leisure
Foot Locker
Companies below the turnover threshold
Ones to watch
MISCELLANEOUS NON-FOOD SPECIALIST RETAILERS
Structure and key trends
Key developments
Issues in the market
Insights and opportunities
Key innovation
Sales trends
Figure 57: Miscellaneous non-food specialist retailers’ sales, 2003/04-2006/07
Profit trends
Figure 58: Miscellaneous non-food specialist retailers’ operating profits, 2003/04-2006/07
Margin trends
Figure 59: Miscellaneous non-food specialist retailers’ operating margins, 2003/04-2006/07
Outlet trends
Figure 60: Outlet numbers operated, by leading miscellaneous non-food specialist retailers, 2005/06-2007/08
 COMPANY ANALYSIS
HMV
Jessops
Halfords
Wyevale and Blooms of Bressingham
Pets at Home
Company with incomplete dataset
Zavvi (formerly Virgin Megastores)
Companies below the turnover threshold
Home entertainment rental and sales companies
Ones to watch
Casualty
HOME SHOPPING RETAILERS
Sector structure and key trends
Key developments
Issues in the market
Sector opportunities
Key innovations
Sales trends
Figure 61: Home shopping retailers’ sales, 2003/04-2006/07
Figure 62: Home shopping retailers’ highest three-year sales growth, 2003/04-2006/07
Profit trends
Figure 63: Home shopping retailers’ operating profits, 2003/04-2006/07
Figure 64: Home shopping retailers’ highest three-year profits growth, 2003/04-2006/07
Margin trends
Figure 65: Home shopping retailers’ operating margins, 2003/04-2006/07
Figure 66: Highest-margin companies, home shopping retailers, 2003/04-2006/07
 COMPANY ANALYSIS
Tesco.com
Next Directory
N Brown
Otto Versand (UK) operating as Grattan and Freemans
QVC
Findel
Empire/Redcats Brands
Avon Cosmetics
Direct Wines
Sit-up
Ocado
eBuyer
JP Boden & Co
Lakeland
Empire Direct
Damartex UK (formerly Thermawear)
Ideal Shopping Direct
Hillarys Blinds
Company with incomplete dataset
Littlewoods Shop Direct Group
Companies with no breakdown of UK retail sales
Amazon
Play.com
Park Group
Companies below the turnover threshold
Ones to watch
Casualty
CONSUMER OUTLOOK AND SPENDING PRIORITIES FOR 2008
Key findings and implications
Outlook
Figure 67: Financial prospects, 2002-08
How have opinions changed?
Figure 68: Financial prospects, 2007 and 2008
Composition of groups
Who’s who?
Spending priorities for 2008
Figure 69: Expenditure priorities, 2007 and 2008
Spending priorities by outlook
Figure 70: Expenditure priorities for 2008, by financial outlook, January 2008
DETAILED CONSUMER DEMOGRAPHICS
Figure 71: Financial prospects, by gender, age and socio-economic group, January 2008
Figure 72: Financial prospects, by region, Mintel’s Special Groups and supermarket used, January 2008
Figure 73: Highest expenditure priorities in 2008, by gender, age and socio-economic group, January 2008
Figure 74: Highest expenditure priorities in 2008, by region, presence of children, lifestage, Mintel’s Special Groups and supermarket used, January 2008
Figure 75: Other important expenditure priorities, by gender, age and socio-economic group, January 2008
Figure 76: Other important expenditure priorities, by region, Mintel’s Special Groups and supermarket used, January 2008
Figure 77: Other important expenditure priorities, by gender, age and socio-economic group, January 2008
Figure 78: Other important expenditure priorities, by region, Mintel’s Special Groups and supermarket used, January 2008

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