Childrenswear Retailing in the UK | Verdict Retail Market Report

• Publication date: April 2012

Verdict Retail forecasts the childrenswear market to grow by 1.7% in 2012, underperforming total clothing due to lower inflation. However, despite pressure on disposable incomes we expect the market to be the most resilient by volume. Parents are reluctant to cut back on childrenswear, purchases are more needs-driven and the market is value-driven allowing for high volumes – supporting volume recovery...

Verdict Retail forecasts the childrenswear market to grow by 1.7% in 2012, underperforming total clothing due to lower inflation. However, despite pressure on disposable incomes we expect the market to be the most resilient by volume. Parents are reluctant to cut back on childrenswear, purchases are more needs-driven and the market is value-driven allowing for high volumes – supporting volume recoveryProvides data and insight on market size, sales and growth rates for childrenswear, overall and at category level, helping to plan range developmentProvides expenditure breakdown across the value, midmarket and premium sectors highlighting to you the areas which offer the most growth potentialMarket issues are examined; the economy, demographic trends, polarisation and multichannel, improving your awareness of challenges and opportunitiesChildrenswear expenditure forecast to 2015 and analysis of volume growth and inflation, aiding future planning and strategisingWhile clothes shopping for their children is one area parents are reluctant to cut back on, the planned changes to child benefits in the UK, is likely to reduce consumers’ discretionary spending on childrenswear unless they make further cost savings elsewhere. We expect spending cuts to fuel the ever growing popularity of value clothing retailersMarket growth is dependent on demographic changes such as birth rates and the average age of mothers. A forecast fall in the number of children aged under one between 2014 and 2016 will negatively affect the market, particularly in infantswear. However, women delaying starting a family will help drive expenditure as incomes are generally higherIn the last five years the value sector of the childrenswear market has become the largest proportion of consumer expenditure, overtaking the midmarket. The low prices offered by value players continue to resonate well with cash conscious shoppers and the premium market satisfies the demand for buying into luxury pieces – squeezing the midmarketHow will the government spending cuts impact childrenswear expenditure and what can I do to encourage customers to purchase discretionary items?What impact will Kiddicare have on the market and who is at risk from its expansion plans? How can I compete with their business strengths?Which segments of the market offer the best growth potential? How is the premium/luxury sector performing considering restricted disposable incomes?Which retailers will gain the most market share in 2012, and who are expected to be the greatest share losers and why?

Children's And Infants Clothing Industry in the United Kingdom

EXECUTIVE SUMMARY
•Key findings
- (Untitled sub-section)
•Main conclusions
- Childrenswear expenditure to grow 1.7% in 2012 up from 0.9% in 2011
- Demographic changes impact future market growth
- Value-driven nature of market to keep inflation low
- Polarisation to continue
- Back to school market dominates value sector
- Premium and luxury retailers will extend presence in UK market
- New entrant Kiddicare promises increased competition
- Mainstream retailers target tween girls, but could do better ...
- … and growth opportunities remain for boys tweenwear
- Online has yet to be fully utilised by retailers
STRATEGIC OPPORTUNITIES
•(Untitled section)
- Encourage shoppers to spend despite limited disposable income
- Justify price positioning
- Maximise potential sales by taking advantage of mini me trend
- Premium and luxury market will continue to grow
- Adapt offer to meet the changing needs of tweens
- Gaps remain in tween boyswear
- Utilise technology to communicate and meet demands of customers
CHILDRENSWEAR MARKET
•Market definition and analysis
- Causes of polarisation in the childrenswear market
•Clothing market spending trends
- Dominance of value players shrinks childrenswear share of the clothing market
- Clothing market value
•Childrenswear in context of the clothing market
- Lower inflation causes childrenswear to underperform total clothing
•Spending trends in childrenswear
- Most resilient clothing sector by volumes …
- … as parents continue to buy into the sector
- Birth rates will impact future growth
- Older mothers contribute to a rise in spend per head in childrenswear
- Declining household income will constrain recovery in 2012
- Government spending cuts will impact ability to spend on childrenswear
- Inflationary pressures kept at a minimum as price competition remains intense
•Market segmentation
- Expenditure breakdown of childrenswear market
- Market dominated by fashion focused clothing retailers
- Luxury brands see childrenswear as a further growth avenue
- Back to school market dominates the value sector
•Kiddicare and its future impact on the rest of the childrenswear market
- Morrisons' purchase of baby care specialist fuels growth in UK presence
- Online innovation and customer service put it ahead of the rest
- Threatens Mothercare's specialist dominance …
- … though clothing will be a tough market for Kiddicare to gain authority in
•Shift in tween market set to continue
- Less desire for tween girl specialists
- Boys tweenwear market provides growth opportunities
•Utilising technology in childrenswear
- Online channel allows retailers to build relationships with consumers
- Limitations of online
- Retailers should target specific age groups via online
MARKET SHARE ANALYSIS
•Clothing market share methodology
- Specialist share is depleted further
- Next remains market leader, though Primark approaches the top
•Winners and losers
- Mothercare struggles to keep up – despite being the only specialist
- Sainsbury's heads towards being in the top five alongside Asda & Tesco
- Peacocks imminent store closures causes share to slide
COMPANY DATA COMPARISONS
•(Untitled section)
- Key UK operating statistics
APPENDIX
•Definitions
- Current prices
- Inflation
- Constant prices
- Total growth
- Volume growth
•Abbreviations
•Further reading
•Ask the analyst
•Verdict Retail consulting
•Disclaimer


TABLES
•Table: Childrenswear market definition 2012
•Table: Summary of clothing sectors 2012e
•Table: Clothing market value and growth drivers 2002–12e
•Table: Clothing market spending trends 2002–12e
•Table: Childrenswear market value and growth drivers 2002–12e
•Table: Childrenswear market inflation/deflation 2007–12e
•Table: Price competitiveness of childrenswear back to school retailers, February 2012
•Table: Specialist & clothing specialist childrenswear market shares 2007–12e
•Table: Non-specialist childrenswear market shares 2007–12e
•Table: Childrenswear retailers key UK operating statistics
•Table: Childrenswear retailers key UK operating statistics continued


FIGURES
•Figure: Polarisation in the childrenswear market 2012
•Figure: Sector shares of the clothing market 2002 and 2012e
•Figure: Childrenswear inflation/deflation, volume and value growth vs clothing 2007–12e
•Figure: Childrenswear expenditure 2001–11 and forecast to 2016
•Figure: Motivations for spending on childrenswear 2012
•Figure: UK births and y-o-y change % 2004–10
•Figure: Forecast UK population of children under 1 year old and growth 2011–16
•Figure: Childrenswear, girlswear, boyswear and infantswear volume growth 2011–16e
•Figure: Childrenswear spend per head 2002–12
•Figure: Spend per head in childrens, girls, boys and infantswear 2002 and 2012e
•Figure: UK household disposable income vs volume growth in childrenswear 2009–15e
•Figure: Child benefit cuts proposed for 2013
•Figure: Methods to reduce impact of inflationary pressures
•Figure: Childrenswear expenditure breakdown % 2007, 2012 and 2016
•Figure: Positioning map of childrenswear players in the UK 2012
•Figure: Mini-me trend adopted by celebrities like Nicole Richie and Victoria Beckham 2012
•Figure: Jennifer Lopez' children modelling for Gucci in its spring/summer 2011 campaign; Suri Cruise in a Burberry coat with Little Marc Jacobs shoes April 2011
•Figure: What is most important when buying school uniform, price or quality? 2011
•Figure: Tesco back to school girls dresses February 2012
•Figure: Tesco Nativity Shepherd and Superman dress-up costumes, February 2012
•Figure: Opening & closing price points for three key back to school garments February 2012
•Figure: Kiddicare store, Peterborough 2012
•Figure: Strengths & threats of Kiddicare 2012
•Figure: Kiddicare clothing offer 2012
•Figure: Next Baby Boutique Blog, Love Parenting blog by Mamas & Papas, February 2012
•Figure: Kiddicare TV February 2012
•Figure: Consumer online shopping barriers for retailers to overcome
•Figure: Boden competition on Facebook, February 2012
•Figure: Childrenswear Top 16 – childrenswear market shares 2007 and 2012e
•Figure: Childrenswear Top 16 – childrenswear winners and losers 2012e on 2011
•Figure: UK space growth vs sales growth 2011/12e
•Figure: Childrenswear sales densities 2011/12e on 2010/11

Companies mentioned
Acertec Limited, Christian Dior S.A., CMS Energy Corporation, Compagnie Financiere Richemont AG, ERGO Versicherungsgruppe AG, Hutchison 3G UK Limited, Industria de Diseno Textil, S.A., J Sainsbury plc, LVMH Moet Hennessy Louis Vuitton SA, Marks and Spencer Group plc, Wm Morrison Supermarkets Plc