Retailing in the U.K

Retailing in the U.K

The retail industry in the UK is a highly competitive arena, in which

price rollbacks, promotions and heavy discounts are the tools in the

battle for share in an increasingly consolidated market. Over the

review period, the increased concentration of the retail market in the

hands of a smaller number of operators allowed superior economies of

scale, which in turn created lower and more affordable prices. Far

wider consumer choice was also made possible as retail outlet sizes

grew.

Consumer confidence has been maintained even though problems such as

those of 11 September 2001, a serious foot and mouth outbreak in

British farming in 2001, and a wider global economic downturn. We are

still a nation of shopkeepers, and shoppers: employment in retailing

has increased, and there are signs that consumers are becoming

cannier, more selective and more demanding, in terms of price. Also,

greater affluence has brought with it a taste for the good life:

higher quality food products, more expensive personal and electrical

goods with which to indulge our leisure time, and also a desire to cut

corners and choose simplicity and convenience, both in food buying,

and sectors such as DIY and even clothing, where high style and

seasonal fashion changes have given way to functionality and ease of

wear. This reflects the changing lifestyles of women, which influenced

many of the retail trends between 1999 and 2003. More women working,

both full-time and part-time, greater affluence among parents, less

time to be at home and cook, sew and clean, and ultimately less time

to shop, has had a huge impact on the high street, as one-s...

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...e end of this period.

The leading revenue source for the UK menswear market in 2004 was the

trousers sector, which accounted for 46.5% of the market’s value. In

value terms this sector was worth $6 billion in 2004. The shirts

sector generated the second largest revenues

in 2004, reaching a value of $4.2 billion, equivalent to 32.4% of the

market’s value.

Going forward, the market is expected to continue expanding at similar

growth rates.

By 2009, the market is forecast to reach a value of $15.3 billion,

which equates to a

CAGR of 3.5% in the 2004-2009 periods, higher than the European

market. The

European figure will be bolstered by the likes of Russia and Poland

(expected to grow with CAGRs of 8.5% and 8.1%) but hindered by many of

the UK’s western Counterparts, recovering from recent declines.