UK Department Stores 2006

UK Department Stores 2006

Introduction

Verdict Research: Despite tough competition from supermarkets, value retailers and specialists the department store market grew again in 2006, by 3.6%, to just over £14bn. Future expansion plans will impact on clothing, electricals and homewares retailers and suppliers, but stated department store expansion plans will need spend per head to grow by 22% by 2012 for sales densities to remain stable.

Scope

In-depth market coverage - Ten years' data on consumer spending trends in department stores - market size, value & volume growth and sector deflation. Value of clothing & footwear, electricals, health & beauty, furniture & floorcoverings, and homewares sales through department stores (2001 and 2006). Profiles of the Top Ten retailers - market shares 2001-2006, key operating data, including sales per and profit per sq ft, store portfolio analysis. Five years' retail space, value and like-for-like growth, average sales densities for last ten years and space allocation data by product category.

Highlights

Growth has returned to the sector after two year's of decline. With 3.6% growth the market has reached its highest ever value of £14.1bn. A shakeout of the weaker operators and consolidation in the sector has led to an improvement in sector performance. Average sales densities across the sector have increased by 6.1% to £344 per sq ft per annum. The Top Ten department store groups control over 90% of the sector following the shakeout of weaker operators.

Reasons to Purchase

Benchmark and see growth trends in product categories through the department store channel. Robust proprietary market share and market size data of sales through department stores. Understand the potential and the challenges facing the department store sector.

TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 16
Key Findings 16
Main Conclusions 17
CHAPTER 2 MARKET ANALYSIS 21
Market Definition 21
Sales by Retailer Type 23
Store Numbers by Retailer Type 25
Selling Space by Retailer Type 26
Sales Density by Retailer Type 29
Channels of Distribution 30
Core Food & Grocery Expenditure 31
Core Food & Grocery vs Total Retail 31
CHAPTER 3 COMPANY DATA ANALYSIS 35
Market Shares 35
Key Operating Statistics 36
Space Allocation 40
Advertising 45
CHAPTER 4 OUTLOOK 48
Overview 48
Growing Dominance of Grocers in UK Retail 49
Food Inflation Intensifies 50
Non-food Development Continues to Drive Growth 51
Tesco Dominates Space Growth 52
Improving Profitability Remains a Key Priority 54
Growth Slow at Discounter End of Market 55
Rise of Environmental Issues 57
CHAPTER 5 ASDA WAL-MART 60
Company Overview 60
Market Share 62
Trading Record 63
Store Portfolio 64
Retail Proposition 67
Space Allocation 70
Outlook 72
CHAPTER 6 CO-OPERATIVE GROUP 74
Company Overview 74
Market Share 76
Trading Record 77
Store Portfolio 79
Retail Proposition 81
Space Allocation 83
Outlook 84
CHAPTER 7 ICELAND 87
Company Overview 87
Market Share 89
Trading Record 90
Current Trading 92
Store Portfolio 92
Retail Proposition 94
Space Allocation 96
Outlook 97
CHAPTER 8 MARKS & SPENCER 100
Company Overview 100
Market Share 102
Trading Record 103
Current Trading 104
Store Portfolio 105
Retail Proposition 107
Space Allocation 110
Outlook 111
CHAPTER 9 WM MORRISON 113
Company Overview 113
Market Share 115
Trading Record 116
Store Portfolio 117
Retail Proposition 118
Space Allocation 121
Outlook 122
CHAPTER 10 SAINSBURY 125
Company Overview 125
Market Share 126
Trading Record 128
Store Portfolio 129
Retail Proposition 132
Space Allocation 135
Outlook 137
CHAPTER 11 SOMERFIELD GROUP 139
Company Overview 139
Market Share 140
Trading Record 142
Store Portfolio 144
Retail Proposition 147
Space Allocation 149
Outlook 150
CHAPTER 12 TESCO 153
Company Overview 153
Market Share 155
Trading Record 156
Current Trading 158
Store Portfolio 159
Retail Proposition 162
Space Allocation 164
Outlook 166
CHAPTER 13 WAITROSE 168
Company Overview 168
Market Share 170
Trading Record 171
Year to end January 2006 171
Six months to July 2006 172
Current Trading 172
Store Portfolio 173
Six months to July 2006 174
Current Trading 175
Retail Proposition 175
Space Allocation 178
Outlook 180
CHAPTER 14 HARD DISCOUNTERS 182
Company Overviews 182
Market Shares 184
Trading Records 186
Store Portfolios 188
Retail Propositions 190
Space Allocations 191
Outlook 193
CHAPTER 15 GLOSSARY 195
Financial Statistics – VAT 195
Trading Profile 195
Physical Development 195
Abbreviations 196

LIST OF TABLES
Table 1: Food & grocery specialists definition 2007 21
Table 2: Total grocery market size 1996-2006e 22
Table 3: Total grocery market size by retailer type 1996-2006e 23
Table 4: Total grocery store numbers by retailer type 1996-2006e 25
Table 5: Total grocery space by retailer type 1996-2006e 27
Table 6: Annual sales densities by retailer type 1996-2006e 29
Table 7: Channels of distribution 2001-2006e 30
Table 8: Consumer spending in core food & grocery product categories at current and constant (2003) prices 1996-2006e 32
Table 9: Retailers share of the total grocery market 2001-2006e 35
Table 10: Leading grocery retailers key operating statistics 2005/06 36
Table 11: Leading grocery retailers store profile statistics 2005/06 37
Table 12: Grocery retailers space allocation 2006 (1) 40
Table 13: Grocery retailers space allocation 2006 (2) 42
Table 14: Grocery retailers space allocation 2006 (3) 44
Table 15: Advertising media expenditure 2001-2005 46
Table 16: Advertising media expenditure 2001-2005 46
Table 17: Leading grocery multiples advertising expenditure by media as % of total 2005 47
Table 18: Asda Wal-Mart company overview 2007 60
Table 19: Asda key operating statistics 2001-2006e 61
Table 20: Asda trading record 1996-2006e 63
Table 21: Asda store profile 1996-2006e 65
Table 22: George standalone, Asda Living and Asda Essentials portfolio by year of opening 2003-2006 65
Table 23: Asda retail proposition 2007 67
Table 24: Asda sales mix 2006 68
Table 25: Asda space allocation 2006 70
Table 26: Co-operative Group company overview 2007 74
Table 27: Co-operative Group food retail key operating statistics 2002-2007e 75
Table 28: Co-operative Group trading record 1996-2006 77
Table 29: Co-operative Group food retail trading record 2000-2006e 77
Table 30: Co-operative Group store profile 1997-2007e 79
Table 31: Co-operative Group store analysis January 2006e 79
Table 32: Co-operative Group retail proposition 2007 81
Table 33: Co-operative Group food division sales mix 2005/06 82
Table 34: Co-operative Group space allocation 2006 83
Table 35: Iceland company overview 2007 87
Table 36: Iceland key operating statistics 2001-2007e 88
Table 37: Iceland trading record 1996-2007e 90
Table 38: Iceland store profile 1996-2007e 92
Table 39: Iceland retail proposition 2007 94
Table 40: Iceland sales mix 2006 94
Table 41: Iceland space allocation 2006 96
Table 42: Marks & Spencer company overview 2007 100
Table 43: Marks & Spencer key operating statistics 2001-2006 101
Table 44: Marks & Spencer UK trading record 1996-2006 103
Table 45: M&S food sales 2000-2006 103
Table 46: Marks & Spencer store portfolio 1996-2006 105
Table 47: Marks & Spencer food space analysis 2000-2006 105
Table 48: M&S retail proposition 2007 107
Table 49: Estimated M&S grocery sales mix 2005/06 109
Table 50: M&S space allocation 2006 110
Table 51: Wm Morrison company overview 2007 113
Table 52: Wm Morrison key operating statistics 2002-2007e 114
Table 53: Wm Morrison trading record 1996-2007e 116
Table 54: Wm Morrison store profile 1996-2007e 117
Table 55: Morrison retail proposition 2007 119
Table 56: Wm Morrison estimated sales mix 2006 120
Table 57: Morrison’s space allocation 2006 121
Table 58: Sainsbury company overview 2007 125
Table 59: Sainsbury UK retail key operating statistics 2002-2007e 126
Table 60: Sainsbury supermarkets trading performance 1996-2007e 128
Table 61: Sainsbury supermarkets store profile 1996-2007e 129
Table 62: Sainsbury supermarkets store profile by type 2006-2007e 130
Table 63: Sainsbury retail proposition 2007 132
Table 64: Sainsbury estimated sales mix 2005/06 133
Table 65: Sainsbury space allocation 2006 135
Table 66: Somerfield Group company overview 2007 139
Table 67: Somerfield Group key operating statistics 2002-2006e 140
Table 68: Somerfield Group trading record 1998-2007e 142
Table 69: Somerfield fascia trading record 1998-2007e 143
Table 70: Somerfield Group store profile 1998-2007e 144
Table 71: Somerfield fascia store profile 1998-2007e 145
Table 72: Somerfield retail proposition 2006 147
Table 73: Estimated Somerfield sales mix 2006 148
Table 74: Somerfield space allocation 2006 149
Table 75: Tesco company overview 2007 153
Table 76: Tesco key operating statistics 2002-2007e 154
Table 77: Tesco trading record 1997-2007e 157
Table 78: Tesco store portfolio 1997-2007e 159
Table 79: Number of UK Tesco stores by format 2002-2007e 159
Table 80: Tesco store format profile August 2006 160
Table 81: Tesco UK stores – size analysis 2005 and 2006 161
Table 82: Tesco retail proposition 2007 162
Table 83: Tesco estimated sales mix 2006 163
Table 84: Tesco space allocation 2006 164
Table 85: Waitrose company overview 2007 168
Table 86: Waitrose key operating statistics 2002-2007e 169
Table 87: Waitrose trading record 1996-2007e 171
Table 88: Waitrose store profile 1996-2007e 173
Table 89: Waitrose store portfolio development 2006/07 173
Table 90: Waitrose retail proposition 2007 175
Table 91: Waitrose estimated sales mix 2006 177
Table 92: Waitrose space allocation 2006 178
Table 93: Hard discounters company overviews 2007 182
Table 94: Hard discounters key operating statistics 2006/07 183
Table 95: Hard discounters estimated sales record 1996-2007e 186
Table 96: Hard discounters estimated store numbers 1995-2007e 188
Table 97: Hard discounters space allocation 2006 191


LIST OF FIGURES
Figure 1: Total growth in consumer expenditure in major retail sectors 2006e on 2001 34
Figure 2: Sales per sq ft comparisons 2005/06e 38
Figure 3: Operating profit per sq ft comparisons 2005/06 39
Figure 4: Key issues in the grocery market 2007 48
Figure 5: Percentage of total expenditure accounted for by the four largest grocers retail sales* 2001-2006e 49
Figure 6: Food & grocery market y-o-y price inflation 2002-2006e 50
Figure 7: Opportunities in non-food for the Big Four UK grocers 2007 51
Figure 8: Leading grocers space growth to 2006 and estimated to 2007 53
Figure 9: Strategies to increase profitability 2007 54
Figure 10: Hard discounters competitive landscape 2006 56
Figure 11: Environmental policies implemented by leading grocers 2006 57
Figure 12: Factors driving the issue of quality in food & grocery 2007 59
Figure 13: Asda grocery market share 2000-2006e 62
Figure 14: Co-operative Group grocery market share 2000-2006e 76
Figure 15: Iceland grocery market share 2000-2006e 89
Figure 16: Marks & Spencer UK grocery market share 2000-2006e 102
Figure 17: Wm Morrison grocery market share 2002-2006e 115
Figure 18: Sainsbury grocery market share 2000-2006e 127
Figure 19: Somerfield Group grocery market share 2002-2006e 141
Figure 20: Tesco UK grocery market share 2000-2006e 155
Figure 21: Waitrose grocery market share 2000-2006e 170
Figure 22: Aldi, Lidl and Netto market shares 1999-2005e 184