UK Retail Futures: Clothing & Footwear 2012

UK Retail Futures: Clothing & Footwear 2012

Introduction
Verdict Research: The UK clothing & footwear sector has undergone a major repositioning since the millennium because of price deflation. Power has shifted from the traditional middle market retailers to volume, price-led retailers and more premium niche brands. This report highlights the trends and indicates both the challenges retailers face and the opportunities available.

Scope
Five-year forecasts for expenditure, inflation and volume growth in clothing, womenswear, menswear, childrenswear, accessories & footwear.

Five-year forecasts for clothing and footwear specialists' sales, store numbers, retail space and sales densities.

Channel of distribution forecasts for specialists, grocers, department stores, home shopping and other non-specialists.

Outlook for both clothing and footwear specialists and a comprehensive analysis of the key issues.

Report Highlights
Growth is set to slow down over the next five years to 17.0% and price deflation will come to an end in 2010.

The influx of new space will make it hard to achieve like-for-like growth, but will provide opportunities to relocate to larger stores in higher footfall locations. This will allow clothing specialists to widen their ranges further, which will put footwear specialists under greater pressure.

Value retailers will account for a quarter of all spending in the clothing & footwear market by 2012.

Reasons to Purchase
Using reliable, authoritative and robust forecasts to make strategic plans with confidence.

Incentivise managers to outperform using independent growth forecasts.

Evaluate your current positioning on the basis of future growth opportunities and realign where necessary to maximise growth prospects.

Table of Contents
CHAPTER 1 EXECUTIVE SUMMARY 5
Key Findings 5
Main Conclusions 6
CHAPTER 2 FORECAST SUMMARY 13
Expenditure Summary 13
Specialists Summaries 16
CHAPTER 3 KEY MARKET ISSUES 19
Demographic Changes 19
Convenience 22
Polarisation Risk to Midmarket 23
Impact of Seasonality - Greater Flexibility 26
Store Expansion and Investment 29
CHAPTER 4 CLOTHING SPECIALISTS OUTLOOK 32
Key Issues 32
Retail Sales & Sources of Sales Growth 35
Retail Sales & Sources of Sales Growth 35
Share of Total Sales & Store Numbers 37
Space Growth 38
Sales Densities 40
CHAPTER 5 FOOTWEAR SPECIALISTS OUTLOOK 42
Key Issues 42
Retail Sales & Sources of Sales Growth 44
Share of Total Sales & Store Numbers 46
Space Growth 47
Sales Densities 49
CHAPTER 6 CHANNELS OF DISTRIBUTION 51
Sales & Spending 51
Forecast Changes for Major Channels 54
Clothing Market Shares 57
Footwear Market Shares 59
CHAPTER 7 CATEGORY FORECAST 61
Expenditure Summary 61
Expenditure Analysis 62
Expenditure Growth 69
Clothing 72
Womenswear 75
Women's Outerwear 78
Women's Underwear 81
Menswear 84
Men's Outerwear 87
Men's Underwear 90
Childrenswear 92
Girlswear 94
Boyswear 97
Infantswear 100
Accessories 103
Footwear 106
CHAPTER 8 UK ECONOMIC FORECASTS 109
Key Messages 109
Gross Domestic Product - GDP 114
How does it affect retail? 114
What's happened? 115
What will happen? 115
Earnings Growth 116
How does it affect retail? 117
What's happened? 118
What will happen? 118
Real Household Disposable Income 120
How does it affect retail? 120
What's happened? 121
What will happen? 121
Employment 122
How does it affect retail? 123
What's happened? 123
What will happen? 124
Inflation 126
How does it affect retail? 127
What's happened? 127
What will happen? 128
Exchange Rates 129
How do they affect retail? 129
What's happened? 129
What will happen? 130
Interest Rates 131
How do they affect retail? 131
What's happened? 132
What will happen? 133
Savings Ratio 134
How does it affect retail? 134
What's happened? 135
What will happen? 135
Consumer Debt 136
How does it affect retail? 136
What's happened? 137
What will happen? 137
Equities 138
How does it affect retail? 138
What's happened? 139
What will happen? 140
House Price Inflation 140
How does it affect retail? 140
What's happened? 141
What will happen? 141
Housing Equity Withdrawal 142
How does it affect retail? 142
What's happened? 143
What will happen? 144
Housing Transactions 144
How does it affect retail? 144
What's happened? 145
What will happen? 146
CHAPTER 9 UK RETAILING FORECASTS 147
Key Indicators 147
Retail Expenditure 1997-2012 149
Sales by Location 2007-2012 156
Sources of Growth 1997-2012 161
Store Numbers by Location 1997-2012 163
Space by Location 1997-2012 166
Sales Density by Location 1997-2012 170
Average Store Size 1997-2012 172
Average Store Sales 1997-2012 174
Online Retail Spending 176
CHAPTER 10 GLOSSARY 179
Terminology 179
Market Definition 180
Location Definitions 181
Town Centre 181
Out-of-town 181
Neighbourhood 181
Non-store Retail 182
Forecasting Methodology 182
Abbreviations 184
List of Tables
Table 1: Clothing & footwear expenditure summary 2002, 2007 & 2012 13
Table 2: Clothing summary 2002, 2007 & 2012 17
Table 3: Footwear summary 2002, 2007 & 2012 18
Table 4: The impact of rising costs on demographic groups and its affect on the clothing and footwear market 2007-2012 21
Table 5: Effect of seasonality - issues for clothing and footwear retailers 2008 27
Table 6: Shopping Center Developments 2008-2012 30
Table 7: Clothing specialists sales 1997-2012 35
Table 8: Sources of growth for clothing specialists 1997-2012 36
Table 9: Total selling space for clothing specialists 1997-2012 39
Table 10: Footwear specialists sales 1997-2012 44
Table 11: Sources of growth for footwear specialists 1997-2012 45
Table 12: Total selling space for footwear specialists 1997-2012 48
Table 13: Clothing and Footwear channels of distribution by retailer type 2006, 2007 and 2012e 53
Table 14: Clothing market shares 2003-2008e 57
Table 15: Footwear market shares 2003-2008e 59
Table 16: Clothing and footwear expenditure summary 1997, 2002, 2007 & 2012 61
Table 17: Clothing & footwear expenditure analysis 2007-2012 62
Table 18: Total clothing & footwear expenditure 1997-2012 69
Table 19: Total clothing expenditure 1997-2012 72
Table 20: Womenswear expenditure 1997-2012 75
Table 21: Women's outerwear expenditure 1997-2012 78
Table 22: Women's underwear expenditure 1997-2012 81
Table 23: Menswear expenditure 1997-2012 84
Table 24: Men's outerwear expenditure 1997-2012 87
Table 25: Men's underwear expenditure 1997-2012 90
Table 26: Childrenswear expenditure 1997-2012 92
Table 27: Girlswear expenditure 1997-2012 94
Table 28: Boyswear expenditure 1997-2012 97
Table 29: Infantswear expenditure 1997-2012 100
Table 30: Accessories expenditure 1997-2012 103
Table 31: Footwear expenditure 1997-2012 106
Table 32: Economic drivers for retail 2008 109
Table 33: Measures of inflation 2008 126
Table 34: UK retailing forecasts summary 2007-2012 147
Table 35: Forecast chronology 2008-2012 148
Table 36: Total consumer retail expenditure 1997-2012 149
Table 37: Sales by location 1997-2012 158
Table 38: Total UK physical store sales & selling space 1997-2012 161
Table 39: Sources of sales growth for physical stores 1997-2012 162
Table 40: Store numbers 1997-2012 163
Table 41: Space by location 1997-2012 166
Table 42: Sales densities by location at current prices 1997-2012 170
Table 43: Average store size by location 1997-2012 172
Table 44: Average sales per store by location at current prices 1997-2012 175
Table 45: Clothing & footwear market definition 2008 180
List of Figures
Figure 1: Clothing & footwear expenditure growth 1997-2007 and forecast to 2012 15
Figure 2: Clothing & footwear specialists growth 1997-2007 and forecast to 2012 16
Figure 3: UK population by age group 2007 and forecast 2012 19
Figure 4: Clothing & footwear market split by value, mid and premium 24
Figure 5: Clothing specialists sales as a % of total retail consumer spending 1997-2012 37
Figure 6: Clothing specialists store numbers (000) 1997-2012 37
Figure 7: Space growth for clothing specialists 1997-2012 38
Figure 8: Clothing specialists sales densities at current prices 1997-2012 40
Figure 9: Clothing specialists sales densities at constant (2003) prices 1997-2012 41
Figure 10: Footwear specialists sales as a % of total retail consumer spending 1997-2012 46
Figure 11: Footwear specialists outlet numbers (000) 1997-2012 46
Figure 12: Space growth for footwear specialists 1997-2012 47
Figure 13: Footwear specialists sales densities at current prices 1997-2012 49
Figure 14: Footwear specialists sales densities at constant (2003) prices 1997-2012 50
Figure 15: Clothing & footwear channels of distribution 2006, 2007 & 2012 52
Figure 16: Changes in shares of clothing & footwear market 2012 on 2007 54
Figure 17: Clothing retailers change in market share 2007e on 2002 58
Figure 18: Footwear retailers change in market share 2007e on 2002 60
Figure 19: Clothing & footwear expenditure growth rates 1997-02, 2002-07 & 2007-12 68
Figure 20: Clothing & footwear expenditure as a % of total spending 1997-2012 70
Figure 21: Clothing & footwear expenditure growth at constant (2003) prices 1997-2012 71
Figure 22: Clothing expenditure as a % of clothing & footwear spending 1997-2012 73
Figure 23: Clothing expenditure growth at constant (2003) prices 1997-2012 74
Figure 24: Womenswear expenditure as a % of clothing & footwear expenditure 1997-2012 76
Figure 25: Womenswear expenditure growth at constant (2003) prices 1997-2012 77
Figure 26: Women's outerwear expenditure as a % of clothing & footwear expenditure 1997-2012 79
Figure 27: Women's outerwear expenditure growth at constant (2003) prices 1997-2012 80
Figure 28: Women's underwear expenditure as a % of clothing & footwear expenditure 1997-2012 82
Figure 29: Women's underwear expenditure growth at constant (2003) prices 1997-2012 83
Figure 30: Menswear expenditure as a % of clothing & footwear expenditure 1997-2012 85
Figure 31: Menswear expenditure growth at constant (2003) prices 1997-2012 86
Figure 32: Men's outerwear expenditure as a % of clothing & footwear expenditure 1997-2012 88
Figure 33: Men's outerwear expenditure growth at constant (2003) prices 1997-2012 89
Figure 34: Men's underwear expenditure as a % of clothing & footwear expenditure 1997-2012 91
Figure 35: Men's underwear expenditure growth at constant (2003) prices 1997-2012 91
Figure 36: Childrenswear expenditure as a % of clothing & footwear expenditure 1997-2012 93
Figure 37: Childrenswear expenditure growth at constant (2003) prices 1997-2012 93
Figure 38: Girlswear expenditure as a % of clothing & footwear expenditure 1997-2012 95
Figure 39: Girlswear expenditure growth at constant (2003) prices 1997-2012 96
Figure 40: Boyswear expenditure as a % of clothing & footwear expenditure 1997-2012 98
Figure 41: Boyswear expenditure growth at constant (2003) prices 1997-2012e 99
Figure 42: Infantswear expenditure as a % of clothing & footwear expenditure 1997-2012 101
Figure 43: Infantswear expenditure growth at constant (2003) prices 1997-2012 102
Figure 44: Accessories expenditure as a % of clothing & footwear expenditure 1997-2012 104
Figure 45: Accessories expenditure growth at constant (2003) prices 1997-2012 105
Figure 46: Footwear expenditure as a % of clothing & footwear expenditure 1997-2012 107
Figure 47: Footwear expenditure growth at constant (2003) prices 1997-2012 108
Figure 48: Real gross domestic product (GDP) at constant (2003) prices 1997-2007 and forecast to 2012 114
Figure 49: Inflation vs average earnings growth 1997-2007 and forecast to 2012 116
Figure 50: Tax & Prices vs Average Earnings 1997-2007 and forecast to 2012 117
Figure 51: Real household disposable income at constant (2003) prices 1997-2007 and forecast to 2012 120
Figure 52: UK employment 1997-2007 and forecast to 2012 122
Figure 53: UK employment 1997-2007 and forecast to 2012 123
Figure 54: Inflation rates Y-o-Y 1997-2007 and forecast to 2012 126
Figure 55: Sterling, dollar and euro exchange rates 1997-2007 and forecast to 2012 129
Figure 56: UK average base rates 1997-2007 and forecast by quarter for 2008 131
Figure 57: UK average base rates 1997-2007 and forecast to 2012 132
Figure 58: Savings ratio 1997-2007 and forecast to 2012 134
Figure 59: Growth in consumer debt 1997-2007 and forecast to 2012 136
Figure 60: FTSE 100 Index 1997-2007 and forecast to 2012 139
Figure 61: UK house price inflation 1997-2007 and forecast to 2012 140
Figure 62: Housing Equity Withdrawal (England & Wales) 1996-2007 and forecast to 2012 142
Figure 63: Housing transactions (England & Wales) 1997-2007 and forecast to 2012 145
Figure 64: Retail spending value, volume and inflation/deflation trends 1997-2007 and forecast to 2012 151
Figure 65: Retail spending as percentage of total consumer spending 1997-2007 and forecast to 2012 153
Figure 66: Consumer, retail and non-retail spending trends % 1997-2007 and forecast to 2012 154
Figure 67: Retail sales by location 2007 and 2012 156
Figure 68: Share of turnover by location 1997, 2002, 2007 & 2012 159
Figure 69: % share of store numbers by location 1997, 2002, 2007 & 2012 165
Figure 70: % share of space by location 1997, 2002, 2007 & 2012 167
Figure 71: Online retail spending 1997-2012 176
Figure 72: Verdict forecasting methodology 183