Clothing Retailing - UK

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    Europe - Retailing - Apparel Retailing

    Clothing Retailing - UK

    Mintel International Group Ltd.
    10/1/2009
    215 Pages

    Abstract:

    There is more choice than ever before in the UK’s clothing mass-market. But it has been dominated by price for much of the last ten years, as cheaper sourcing from the Far East has facilitated the growth of value retailers.

    This has increased competition and squeezed the middle-market players. And with youth unemployment rising fast, competition looks set to continue revolving around price for the foreseeable future.

    This will exert further downward pressure on retailers’ margins and inhibit their ability to invest in new initiatives and stores. Not only that but it will make it hard for retailers to pass on the full price increases on imported goods.

    But there is a glimmer of hope for the mid/upper mass market players. Over one in ten people in a survey commissioned especially for this report say they will spend more on clothing in the year ahead. But this figure rises to 22% of the ABC1 pre-/no family lifestage - a group that is less economically challenged and is more likely to be influenced by quality rather than low prices.

    Main themes

    • How has the recession changed consumers’ shopping habits for clothing and are there key differences by demographic group?
    • Who have the retail winners and losers been as a result?
    • How have the under 25s, a key group for fashion, responded to the downturn and will their shopping habits change as youth unemployment rises.
    • How are the UK’s future demographic trends likely to impact the clothing market?
    • What are consumer’s future spending intentions on clothes?
    • How have clothing specialists performed relative to non-specialist competition and what part did the Internet play in this?


    Table of Contents:

    ISSUES IN THE MARKET
    Main themes
    Definitions
    Abbreviations


    MARKET IN BRIEF
    Future
    Deflation pervades
    Consumer context
    Competitive landscape


    INTERNAL MARKET ENVIRONMENT
    Key points
    Clothing takes the biggest hit among those cutting back
    Figure 1: The items adults are cutting back on in the recession, February 2009
    The price dilemma for retailers
    Figure 2: UK clothing price deflation, 2005-Q2 2009
    The young - in denial?
    Less concerned about their finances
    Figure 3: UK: Concern over finances, % point change, Feb 2008-Jun 2009
    But have they reached the tipping point?
    Figure 4: UK: Concern over job prospects, 18-25s, February 2008-June 2009
    Changing allegiances
    Figure 5: Selected retailers where the 18-25s buy clothes, May 2008 and July 2009
    Competition from non-specialists
    Figure 6: Clothing specialists as % of all spending on clothing and footwear, 2001-08
    The power of the internet


    BROADER MARKET ENVIRONMENT
    Key points
    Mixed impact of changing demographics
    Figure 7: Implications of changing demographics of the UK population for clothing market, 2009-14
    Late 2008 - the economy moves into recession
    Figure 8: UK: GDP real growth, 1999-Q2 2009
    2008 - consumer confidence in freefall…but retail sales robust
    Figure 9: Nationwide Consumer Confidence Index, Jan 2006-July 2009
    2009 - confidence starts to recover…will retail sales follow?
    Figure 10: UK: Retail sales value growth, 2007-09 (August)
    Implications for clothes retailing


    COMPETITIVE CONTEXT
    Key points
    Clothing performance held back by deflation
    Figure 11: Consumer spending on clothing and other fashion-influenced product markets, 2004-08
    Figure 12: Growth in spending on clothing and other fashion-influenced product markets, 2004-08
    Spending patterns change in the recession
    Figure 13: Growth in spending on clothing and other fashion-influenced product markets, 2007-09
    And men cut back more
    Figure 14: Clothing spending breakdown, 2004 vs 2008
    Consumer prices
    Figure 15: Consumer prices on select fashion-influenced categories, 1996-2008
    Figure 16: Consumer prices on select fashion-influenced categories, 1996-2008


    STRENGTHS AND WEAKNESSES IN THE MARKET
    Strengths
    Weaknesses


    SECTOR SIZE AND FORECAST
    Key points
    Economic and consumer outlook
    Retail forecasts
    Improving short term outlook for retail
    Clothing specialists should maintain retail market share in 2009
    Longer term they should outperform all retail
    Figure 17: UK: Clothing specialists sales, 2004-14
    Past trends
    Clothing specialists struggle to hold onto retail market share
    Figure 18: UK: Clothing specialists sales, 2004-08
    Figure 19: UK: Clothing specialists as % of all retail sales, 1999-2008


    CHANNELS OF DISTRIBUTION
    Figure 20: UK: Clothing market - channels of distribution, 2006 and 2008
    Specialists
    Department stores struggle to maintain market share
    Grocers catch up with department stores
    Home shopping
    Others


    RETAILER COMPETITOR ANALYSIS
    Key points
    Leading specialists
    Value retailers make significant gains
    Young fashion holds up too
    But the mid-market has been seriously squeezed
    Rebuilding for the future
    Figure 21: Leading clothing retailers, 2008/09
    Evaluation
    Figure 22: Selected UK clothing retailers, evaluation, 2009
    Market shares
    Figure 23: UK: Leading clothing retailers, market shares, 2008


    RETAIL ADVERTISING AND PROMOTION
    Key points
    Cutting back in the downturn
    Figure 24: Main media advertising spend, by leading clothing retailers, 2004/05-2008/09
    M&S dominates
    Next builds why Matalan contracts
    Figure 25: Top three advertisers - spending index, 2004/05-2008/09
    Spending by media
    Figure 26: Main media advertising spend, by leading clothing retailers, by media, 2008/09


    THE CONSUMER - WHERE THEY BUY CLOTHING
    Key points
    Where they buy clothing
    Figure 27: Where they buy clothes, July 2009
    The changing face of the UK high street
    Figure 28: Outlets used for purchasing clothing in the last 12 months, 2004-09
    Who buys where
    Women far more enthusiastic shoppers than men
    Figure 29: Where they buy clothes - top 10, by gender, July 2009
    Next corners the 25-44-year-old market
    Figure 30: Where they bought clothes in the last 12 months - top 10, by select age bands, July 2009
    And e-commerce grabs the attention of the young
    Figure 31: Internet shoppers, by age, July 2009
    M&S dominates the older end of the market
    Figure 32: Where they bought clothes in the last 12 months - top 10, by select age bands, July 2009
    M&S and department stores well placed to benefit from socio-economic shift
    Figure 33: Selected retailers where they buy clothes, by socio-economic group, July 2009
    Cross category shopping
    Figure 34: Where they bought clothes in last 12 months, by grocery stores used, July 2009
    Figure 35: Where they bought clothes in last 12 months, by grocery stores used, July 2009


    ALEXON GROUP
    Figure 36: Alexon Group Plc: Sales as share of clothing retailers’ sales in UK, 2004-08
    Recent history
    Financial performance
    Figure 37: Alexon Group Plc: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 38: Alexon Group Plc: Outlet data, 2005-09
    Retail offering
    Market positioning
    Brands
    Figure 39: Alexon Group: List of brands, 2008/09
    e-commerce and home shopping


    ARCADIA GROUP
    Figure 40: Arcadia Group Brands Ltd: Sales as share of clothing specialists in the UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 41: Arcadia Group: Group financial performance, 2003/04-2007/08
    Store portfolio
    Figure 42: Arcadia Group Brands Ltd: Outlet data, 2004-08
    Figure 43: Arcadia Group: Breakdown of international outlets, September 2009
    Figure 44: Arcadia Group: Breakdown of European outlets, by fascia, September 2009
    Retail offering
    Topshop
    Market positioning
    Brands/product offer
    Pricing
    Topman
    Market positioning
    Brands/product offer
    Pricing
    Dorothy Perkins
    Market positioning
    Brands/product offer
    Pricing
    Burton
    Market positioning
    Brands/product offer
    Pricing
    Miss Selfridge
    Market positioning
    Brands/product offer
    Pricing
    Evans
    Market positioning
    Brands/product offer
    Pricing
    Wallis
    Market positioning
    Brands/product offer
    Pricing
    e-commerce and home shopping
    Figure 45: Arcadia Group: Websites, 2009


    AURORA FASHIONS (FORMERLY MOSAIC FASHIONS)
    Figure 46: Aurora Fashions Ltd: Sales as share of clothing specialists’ sales in Europe, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 47: Mosaic Fashions: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 48: Mosaic Fashions: Outlet data, 2004-09
    Figure 49: Mosaic Fashions: Outlets by country, August 2009
    Retail offering
    Coast
    Market positioning
    Brands/Product offer
    Pricing
    Karen Millen
    Market positioning
    Brands/Product offer
    Pricing
    Oasis
    Market positioning
    Brands/Product offer
    Figure 50: Oasis: brands, 2009
    Pricing
    Warehouse
    Market positioning
    Brands/Product offer
    Pricing
    e-commerce and home shopping


    BENETTON GROUP
    Figure 51: Benetton (UK): Estimated retail sales as share of clothing specialists in the UK, 2004-08
    Strategic evaluation
    Recent history
    Figure 52: Benetton Group: Group financial performance, 2004-08
    Figure 53: Benetton UK: Financial performance, 2004-08
    Store portfolio
    Figure 54: Benetton Group: Outlet data, 2004-08
    Retail offering
    Market positioning
    Product offer
    Advertising and marketing
    e-commerce and home shopping


    BHS
    Figure 55: Bhs Plc: Sales as share of clothing specialists’ sales in UK, 2003-07
    Strategic evaluation
    History
    Financial performance
    Figure 56: Bhs Plc: Group financial performance, 2003/04-2007/08
    Store portfolio
    Figure 57: Bhs Plc: Outlet data, 2005-09
    Figure 58: Bhs: International franchises, number of outlets, 2003-08
    Retail offering
    Market positioning
    Product offer
    Brands
    Figure 59: Bhs: Brands, 2009
    Pricing
    Operational issues
    e-commerce and home shopping


    GAP
    Figure 60: Gap Inc: UK sales as share of clothing specialists’ sales in UK, 2004-08
    History
    Financial performance
    Figure 61: Gap Inc: Group financial performance, 2004/05-08/09
    Figure 62: Gap UK: Financial performance, 2004/05-08/09
    Store portfolio
    Figure 63: Gap Inc: Outlet data, 2005-09
    Retail offering
    Market positioning
    Brands
    Figure 64: Gap Inc: Brands, 2008
    Product offer/Pricing
    e-commerce and home shopping


    GRUPO INDITEX UK
    Strategic evaluation
    Recent history
    Financial performance
    Figure 65: Grupo Inditex: Group financial performance, 2004/05-2008/09
    Figure 66: Grupo Inditex: Estimated sales in key European markets, 2004/05-2008/09
    Figure 67: Inditex brands: Sales in the UK, 2006/07-2008/09
    Store portfolio
    Figure 68: Grupo Inditex: Outlet data, 2005-09
    Figure 69: UK: Grupo Inditex: Stores by fascia, 2005-09
    Retail offering
    Market positioning
    Zara
    Brands
    Product offer
    Massimo Dutti
    Product offer/pricing
    Bershka
    Product offer/pricing
    e-commerce and home shopping
    Figure 70: Grupo Inditex: Company websites, 2009


    H&M HENNES & MAURITZ
    Figure 71: H&M Hennes & Mauritz: Sales as share of clothing specialists’ sales in the UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 72: H&M Hennes & Mauritz: Group financial performance, 2004-08
    Figure 73: H&M Hennes & Mauritz UK Ltd: Financial performance, 2003/04-2007/08
    Store portfolio
    Figure 74: H&M Hennes & Mauritz: Outlet data, 2004-08
    Retail offering
    Market positioning
    Product offer
    Brands
    Figure 75: H&M: Own brand portfolio, 2009
    Pricing
    Operations
    COS
    Advertising and marketing
    Figure 76: H&M Hennes & Mauritz: Breakdown of UK advertising expenditure, 2008/09
    e-commerce and home shopping


    MACKAYS STORES GROUP
    Figure 77: Mackays Stores Group Ltd: Sales as share of clothing specialists’ sales in UK, 2004-08
    Recent history
    Financial performance
    Figure 78: Mackays Stores Group Ltd: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 79: Mackays Stores Group Ltd: Outlet data, 2005-09
    Retail offering
    Market positioning
    Product offer
    Pricing
    e-commerce and home shopping


    MANGO
    Figure 80: Mango UK: Sales as share of clothing specialists’ sales in the UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 81: Mango Group: Group financial performance, 2004-08
    UK performance
    Figure 82: Mango UK Ltd: financial performance, 2004-08
    Store portfolio
    Figure 83: Mango Group: Outlet data, 2004-08
    Retail offering
    Market positioning
    Brands
    Product offer
    Pricing
    Advertising and marketing
    e-commerce and home shopping


    MARKS & SPENCER
    Figure 84: Marks & Spencer (UK): Sales as share of clothing specialists’ sales in the UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 85: Marks & Spencer (UK): Group financial performance, 2004/05-2008/09
    Figure 86: Marks & Spencer (UK): UK sales and like-for-like growth, 2004/05-2008/09
    Figure 87: M&S: UK retail sales by product category, 2004/05-2008/09
    Store portfolio
    Figure 88: M&S: UK and ireland Outlet data, 2005-09
    Figure 89: M&S: Outlets not specialising in food, by type, 2008-09
    Retail offering
    Market positioning
    Brands/Product offer
    Figure 90: Marks & Spencer: Clothing own brand portfolio, 2009
    Pricing
    Figure 91: Marks & Spencer: Clothing price architecture, 2004-08
    Operational issues
    Advertising and marketing
    e-commerce and home shopping
    Figure 92: M&S: M&S Direct sales, 2006/07-2008/09


    MATALAN
    Figure 93: Matalan: Sales as share of clothing specialists’ sales in UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 94: Matalan: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 95: Matalan: Outlet data, 2005-09
    Retail offering
    Market positioning
    Brands/product offer
    Figure 96: Matalan: Own-brand portfolio, 2009
    Pricing
    Advertising and marketing
    e-commerce and home shopping


    MONSOON
    Figure 97: Monsoon Plc: Sales as share of clothing specialists’ sales in UK, 2004-08
    History
    Financial performance
    Figure 98: Monsoon Plc: Group financial performance, 2003/04-2007/08
    Store portfolio
    Figure 99: Monsoon Plc: Outlet data, 2003-08
    Retail offering
    Market positioning
    Brands/Prices
    Figure 100: Monsoon Plc: Brand ranges, 2008
    Product offer
    e-commerce and home shopping


    NEW LOOK
    Figure 101: New Look Group Plc: Sales as share of clothing specialists’ sales in Europe, 2004-08
    Figure 102: New Look Group Plc: Sales as share of clothing specialists’ sales in UK, 2004-08
    Strategic evaluation
    Recent history
    Financial performance
    Figure 103: New Look Group Plc: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 104: New Look Group Plc: Outlet data, 2005-09
    Figure 105: New Look Group PLC: Outlet data, by country, 2008-09
    Retail offering
    Market positioning
    Brands/Product offer
    Figure 106: New Look: Womenswear own brand collections, 2009
    Pricing
    Operational issues
    Advertising and marketing
    Figure 107: New Look Breakdown of advertising expenditure in the UK, 2008
    e-commerce and home shopping


    NEXT GROUP
    Figure 108: Next Group: Sales as share of clothing specialists’ sales in the UK, 2004-08
    Strategic evaluation
    History
    Financial performance
    Figure 109: Next Group: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 110: Next Group: Next Retail like-for-like sales performance, 2005/06-2008/09
    Figure 111: Next Group: Outlet data, 2005-09
    Figure 112: Next: International outlets, 2007-09
    Retail offering
    Market positioning
    Brands
    Product offer
    Pricing
    Figure 113: Next: Change in average selling prices, by season, 2006-08
    Advertising and marketing
    e-commerce and home shopping


    PEACOCK GROUP
    History
    Financial performance
    Figure 114: Peacock Group: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 115: Peacock Group: Outlet data, 2005-09
    Retail offering
    Market positioning
    Product offer/brands
    Figure 116: Peacocks and bonmarche sub-brands, 2009
    Pricing
    e-commerce and home shopping


    PRIMARK/PENNEYS
    Figure 117: Primark: Sales as share of Clothing specialists’ sales in the UK, 2004-08
    Strategic evaluation
    History
    Financial performance
    Figure 118: Primark Stores Ltd: Group financial performance, 2004-09
    Store portfolio
    Figure 119: Primark Stores Ltd: Outlet data, 2004-09
    Retail offering
    Market positioning
    Brands/product offer
    Figure 120: Primark: Own brand portfolio, 2008/09
    Pricing
    Operational issues
    Advertising and marketing
    e-commerce and home shopping


    RIVER ISLAND CLOTHING
    Figure 121: River Island Clothing Co Ltd: Sales as share of clothing specialists’ sales in UK, 2004-08
    History
    Financial performance
    Figure 122: River Island Clothing Co Ltd: Group financial performance, 2004-08
    Store portfolio
    Figure 123: River Island Clothing Co Ltd: Outlet data, 2004-08
    Figure 124: River Island Clothing Co Ltd: Breakdown of overseas outlets, by market, 2008
    Retail offering
    Market positioning
    Product offer
    Pricing
    e-commerce and home shopping


    TK MAXX
    Figure 125: TK Maxx: Sales as share of clothing specialists’ sales in UK, 2004-08
    History
    Financial performance
    Figure 126: TK Maxx: Group financial performance, 2004/05-2008/09
    Store portfolio
    Figure 127: TK Maxx: Outlet data, 2005-09
    Retail offering
    Market positioning
    Product offer/brands
    Pricing
    e-commerce and home shopping


    APPENDIX - INTERNAL MARKET ENVIRONMENT
    Figure 128: Selected retailers where the 15-24s buy clothes, May 2008 and July 2009


    APPENDIX - WHERE THEY BUY CLOTHING
    Figure 129: Where they bought clothing in last 12 months, by demographics, July 2009
    Figure 130: Where they bought clothing in last 12 months, by demographics, July 2009
    Figure 131: Where they bought clothing in last 12 months, by demographics, July 2009
    Figure 132: Where they bought clothing in last 12 months, by demographics, July 2009


    APPENDIX: RESEARCH METHODOLOGY

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