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Value Clothing Retail in the UK - Sample Slides


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Growth in value clothing expenditure will slow substantially in the five year period to 2012, with limited household disposable income restricting discretionary purchases. However, 27.6% growth is a resilient performance, with the key contributors – Primark, Sainsbury's and H&M – increasing their store presence and improving ranges encouraging consumers to spend despite tight purse strings.

For the first time, from 2014, we forecast growth in value clothing expenditure to underperform the overall clothing market. A gradual shift in shopping habits of consumers making more considered purchases and wanting better value for money through quality and product design will result in a proportion of consumers trading up to midmarket players

Despite the lower costs associated with OOT, high street locations are much more desirable for attracting younger shoppers. While OOT stores remain important for catering to families, value players need to have a presence in high footfall locations to build retail brand awareness – particularly those with a high fashion offer which target 16–24s

Logistically, Europe offers more convenient expansion than in regions further afield due its closer proximity to the UK, similar seasons and westernised consumers wanting fashions similar to the UK's. European competitors would include C&A, H&M, Kiabi and TK Maxx so UK players must identify gaps in the markets to ensure successful launches.

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Value Clothing Retail in the UK - Sample Slides

  1. 1. Value Clothing Retail in the UK | Verdict Market ReportPublished August 2012 Verdict Research Ref: CM00202-003
  2. 2. The Ideal UK Value Clothing Retailer in 2016 Provides an Outfit building Target High footfall Destination Strong use of Multichannel Fewer instorestores Showrooms tools to underserved locations stores social media experience increase spend consumers Ideal Value Clothing Retailer 2016 Contactless Provide an International Multichannel payment & instore Social media presence self-checkout experienceCM00202-003 Value Clothing Retail in the UK | Verdict Market Report
  3. 3. Weaker players still at risk from younger, more fashion targeted retailers Age 65+ Bonmarché Ageing population + a more fashion conscious TJ Hughes consumer = area of opportunity Store Twenty Ethel AustinSainsbury’s 35 One Asda Richleys Peacock Stewarts Matalan Tesco TK Maxx sMark H&M Prima New Look The Officers One Internacio Select rk 21 Forever Club nale Retail Woolworths 0 Classic Contemporary/ Fashion mainstream Entered administration between 2008–12 but Fallen out of the still trading marketCM00202-003 Value Clothing Retail in the UK | Verdict Market Report
  4. 4. Store environment must suit male shopping habitsWhile value menswear offers opportunities for retailers, they cannot assume that men will shop value retail stores in thesame way women do. Women have more of an interest in fashion and trends, and are more comfortable rummaging storesand spending time shopping to find clothes they desire. In contrast, men are less likely to want to shop in busy stores andspend any length of time browsing. Ranges need to be well edited and presented to make it easier for them to shop.Primark opened menswear concessions in two Selfridges stores in autumn 2011, which is a sensible move if the valueretailer is to appeal more to male shoppers. These concessions allow male shoppers to access an edited range of clothesin an enjoyable, premium shopping environment – helping to remove the stigma of shopping at a value clothing shop whichmales still find harder to accept than females. While this kind of strategy is difficult for other value retailers to implement,they need to consider how they can make the shopping environment simple and easy to shop. Displaying fewer options persq ft to allow for easier browsing is one option: having more shopfloor staff on hand to keep the floor looking wellpresented is another.Range segmentation would satisfy the desire to shop from brandsValue retailers have started to segment menswear ranges into sub brands, which is an effective way of encouraging men tospend as they like to buy into specific brands. Matalan, Primark and Tesco have increased their menswear sub brands overthe last three years, but it is an area where retailers can make further improvements, particularly with instore displays andsegmentation. Sub brands need to be well targeted through the product offer and instore visuals so male shoppers knowwhich range is suitable for their age or style. This will also make the menswear department easy to shop as a sea ofmerchandise can be daunting. Introducing sub brands enables retailers to offer a good-better-best price architecture acrossmenswear ranges – an area which is still underdeveloped compared to womenswear. Value retailer Primark was able toattract male fashion conscious consumers with its limited edition t-shirts in collaboration with graphic artist Ben Allen in2010 – it should introduce such ranges again to build awareness among male shoppers of its more fashion-led offer.
  5. 5. Slim store portfolio + high footfall locations + smaller formats = enhanced profitability Retailers estimated space growth, sales density and operating margins 2010/11 500 Operating margin 450 Prima Tesco percentage rk10.2 6.2 point change 400 Matalan +6.5 2010/11 on 2005/06 +4.5 TK MaxxClothing sales density(£/sq ft) * Bonmarché 350 +1.6 Tesco +0.2 300 Average Average -0.8 6.7 * Peacocks - 250 New H& 7.4 TK Maxx 1.0 M*3.1 Look 6.7 Primark -4.0 Bonmarch New Look -5.8 200 é *1.8 11.0 * H&M -8.8 Peacock * Operating margin is for 2009/10 on 2004/05 150 Matalan s *7.5 -2 0 2 4 6 8 10 12 14 UK space growth (%)CM00202-003 Value Clothing Retail in the UK | Verdict Market Report
  6. 6. Utilise advancing technology to make shopping more convenient Multichannel opportunities Window Click & collect Outfit building M-commerce shopping via kiosks tools QR codes Tablet and Browsing Utilise social smartphone lounges media appsCM00202-003 Value Clothing Retail in the UK | Verdict Market Report
  7. 7. To buy this report please visit Verdict research store: 0207 551 9664