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Footwear Retailing in the UK | Verdict Market Report

Growth of 0.4% year-on-year in 2012 is the second lowest growth rate in the UK footwear market since 2000. Footwear is a discretionary spend that can be deferred, though less so for children, and consumers, faced with continuing financial uncertainty and possible job losses are putting unnecessary expenditure on hold. Volumes will recover only marginally (+0.1%) as inflation eases to 0.3%.

Features and benefits

  • Market issues are examined; the economy, consolidation, space efficiency and multichannel, improving your awareness of challenges and opportunities
  • Provides data and insight on market size, sales and growth rates for footwear overall and by channel, helping to identify growth opportunities
  • Forecasts expenditure and spend per head for womens, mens and childrens footwear to 2016, highlighting the areas that offer the most growth potential
  • Footwear expenditure forecast to 2016 and analysis of volume growth and inflation, aiding future planning and strategising

Highlights

Future growth in the women's footwear sector will be driven by value players and high end retailers such as Kurt Geiger, as low price footwear sold by the likes of Primark will boost volumes, while spend is increased by consumers trading up to retailers at the premium end of the market for branded goods. This leaves the middle market exposed.

We predict that specialists Kurt Geiger, Office and Schuh will all increase market share in 2012, owing to strong propositions, broad consumer appeal and trend-led images. Kurt Geiger in particular has encouraged shoppers to trade up and invest in higher price, good quality shoes despite consumers' squeezed disposable incomes.

JD Sports and Sports Direct have improved their standing in the market, often at the cost of similar retailers such as JJB. Sportswear players are heavily reliant on branded footwear, therefore need to compete on price, range and service to drive footfall and sales. The Olympics will provide a clear opportunity for such retailers to boost sales.

Your key questions answered

  • What is driving women's spend in footwear and how can I increase sales in men's shoes? What impact will value players have on children's footwear?
  • What challenges do footwear specialists face from clothing retailers and sportswear players? How can they protect their place in the market?
  • Which retailers will gain the most market share in 2012, and who are expected to be the greatest share losers and why?
  • What can I do to improve space efficiency and profitability? What changes can I make to my multichannel offer to remove consumer shopping barriers?

Table of Contents

EXECUTIVE SUMMARY

  • Key findings
    • (Untitled sub-section)
  • Main conclusions
    • Footwear expenditure growth the second lowest since 2000
    • Not until 2013 can we expect growth to accelerate, and then only marginally
    • Trading up and down drives women's footwear spending and leave middle market exposed
    • Opportunities to drive more men's footwear sales
    • The resilience of spending on children's footwear will be challenged by value retailers
    • Specialists find it tough as non-specialists expand footwear ranges
    • Further consolidation among value specialists
    • Yet specialists like KG, Office and Schuh will prosper
    • Midmarket battles over shoppers
    • Abolition of anti-dumping duties provides more flexibility in margin
    • Clothing retailers pile on the pressure
    • Clear communication secret to cashing in on Olympics
    • Multichannel a must

FOOTWEAR STRATEGIC OPPORTUNITIES

  • Multichannel
  • Space efficiency crucial
  • Fashionability
  • Specialists need to play on their strengths and differences to win
  • Sportswear specialists focus on footwear
  • To drive volumes

FOOTWEAR MARKET

  • Market definition and analysis
  • Footwear market spending trends
    • Women's footwear continues to drive the market
    • Second lowest growth in footwear this century
    • Low consumer expenditure hits specialists hardest, forcing further market consolidation
    • Improved consumer confidence and fashion trends will facilitate market recovery from 2014
    • End of anti-dumping tariffs set to ease inflationary pressures for retailers
    • Price hikes more tricky to disguise in footwear

FUTURE MARKET GROWTH

  • Men's footwear makes big growth improvement from low base
    • Women's footwear set to account for almost 50% of total footwear expenditure
    • Clothing retailers partnering with specialists
    • Value players drive volumes in women's footwear
    • Spend per head set to improve as consumers opt for quality or high volumes of low price footwear

SURVIVING SPECIALISTS STILL UNDER THREAT FROM CLOTHING RETAILERS

  • Specialist share of the market is squeezed further in 2012 and will continue to be
    • Future challenges for specialists
    • Winning specialists
    • ...have something non-specialists will find hard to achieve

ONGOING THREAT OF SPORTSWEAR SPECIALISTS

  • Share of the market forecast to grow further
    • Footwear gets more focus at sportswear specialists are transferring further share from elsewhere
    • Olympics should boost sales in sportswear specialists
    • Enhanced service levels could grow market presence further
    • Branded offer and value propositions appeal to younger shoppers
    • Customers of JD Sports and Sports Direct shop around less concerning for competitors
    • JJB's cash injection could change dynamics of sportswear specialist channel
    • Overcoming threats and weaknesses will strengthen sportswear specialists market position

SPACE PRODUCTIVITY BECOMES INCREASINGLY IMPORTANT IN FOOTWEAR RETAILING

  • (Untitled section)
    • Sales vs space growth must be examined at underperforming retailers
    • Brantano and Shoe Zone Group have least productive space
    • Online will increasingly contribute to low space productivity
    • ...making smaller stores a more profitable option for specialists
    • Schuh and Office stand out from the footwear crowd

FOOTWEAR RETAILERS MUST IMPROVE ONLINE CAPABILITIES

  • (Untitled section)
    • Online operations must be pursued to keep up with competitors
    • Stores and online functionality should work hand in hand
    • Utilise online facilities instore to boost sales
    • Retailers need to address footwear shoppers' concerns with online buying

MARKET SHARE ANALYSIS

  • Footwear market share methodology
  • Winners and losers
    • Specialists struggle in an increasingly competitive market
    • Clothing specialists continue to steal share in the footwear market
    • Grocers best able to compete on price

APPENDIX

  • Definitions
    • Current prices
    • Inflation
    • Constant prices
    • Total growth
    • Volume growth
  • Further reading
  • Ask the analyst
  • Verdict consulting
  • Disclaimer

TABLES

  • Table: Footwear market definition 2012
  • Table: Summary of footwear market segments 2012e
  • Table: Footwear sales and y-o-y changes 2002-12e
  • Table: Footwear sales breakdown 2008-16e
  • Table: Footwear market shares for specialists 2007-12e
  • Table: Footwear market shares for non-specialists 2007-12e

FIGURES

  • Figure: Key issues in footwear retailing in 2012
  • Figure: Segmental breakdown of the footwear market 2002 and 2012e
  • Figure: Market share trends in footwear 2012 on 2007
  • Figure: Footwear positioning map 2012
  • Figure: Footwear inflation/deflation, volume and value growth 2008-16e
  • Figure: Footwear and clothing inflation/deflation 2008-16e
  • Figure: Footwear expenditure vs spend per head forecast to 2016
  • Figure: Footwear expenditure growth and spend per head segmental forecast to 2016e
  • Figure: Women's footwear trends 2012
  • Figure: Clarks marketing 2012
  • Figure: Men's footwear trends 2012
  • Figure: Footwear market share 2007-12e
  • Figure: Challenges for footwear specialists
  • Figure: Footwear specialists market share
  • Figure: Limitations of non-specialist footwear retailers
  • Figure: Concentration of main user share of Top Five footwear retailers in 2012
  • Figure: Sports specialists market shares 2008-12
  • Figure: SWOT analysis for development of future strategies at sportswear specialists
  • Figure: UK sales growth vs space growth 2010/11e
  • Figure: Footwear retailers' sales densities 2009/10e and 2010/11e
  • Figure: Footwear retailers operating margins % 2005/06 and 2010/11
  • Figure: Retailers est space growth, sales density and operating margins 2010/11
  • Figure: Multichannel optimisation 2012
  • Figure: Barriers to online footwear shopping for retailers to overcome
  • Figure: Clarks footwear sizing and fit guide 2012
  • Figure: Dune transactional website and catwalk videos April 2012
  • Figure: Online footwear advice and blogs 2012
  • Figure: Footwear Top 18 market shares 2007 and 2012e
  • Figure: Footwear Top 18 market share winners & losers 2012e on 2011
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