It identifies the factors that have ensured survival, as well as those behind casualties, and projects these into future growth strategies, with a retail sector outlook, and recommendations on how to successfully adapt your business to a low growth environment.
Scope
*A thorough assessment of the performance in UK food and non-food sectors in 2009, identifying trends, impact on space, productivity and sales.
*Detailed characteristics of retail survivors and casualties and how businesses can learn from these.
*Action points businesses can implement in future strategy to safeguard themselves from further downturns.
*Forecasts for growth in the retail sector, and online sales, until 2013. Changes in space, expenditure, outlet numbers and vacancy rates in 2009.
Highlights
The recession has shaken out weaker operators and left the strongest survivors to pick up their business, but this is a short term fillip for retailers. Future growth will be limited we do not expect annual growth to get close to 3.0% until 2013, and in 2010 we expect it to be only a little above 1.0%.
The result of a reduction in capacity is that surviving space is becoming more productive; enhanced by online sales. Without the contribution of online, average sales densities in 2009 would be £474 per sq ft rather than £511 per sq ft. Retailers must in future devise new expansion strategies based on profitability, rather than scale.
Having flexibility in your proposition to exploit sales trends is a key advantage, and retailers must foster this in their culture. A common factor among winners is either being in the sectors that cater for recessionary trends, or adapting an offer and product range to benefit from them.
Reasons to Purchase
*Using expert analysis understand the current dynamics of the UK retail sector and use this to devise successful strategies for market share gains
*Identify growth prospects and trends in individual sectors and plan investment accordingly
*Achieve competitive advantage by using action points as a framework for devising a winning retail strategy
Table of Contents :
Introduction 1
SUMMARY 1
Retailers must adapt to a low growth future; ... 1
... and a different consumer mindset; 1
They must cultivate a consistently lean and cost efficient organisation; 1
Invest in innovation, distinctive branding and communication; 1
While propositions must be flexible - to exploit trends effectively; 1
And being multichannel is vital. 1
Executive Summary 2
KEY FINDINGS 2
Retailers must adapt to a low growth future 2
Consumers have a different mindset and retailers must work harder to win a share of their spend 2
A culture of cost efficiency and lean operations is necessary at all times, not just during recessions 2
Innovation is vital 2
Distinctive branding will keep retailers top-of-mind and create long lasting loyalty and trust 2
Communication is crucial in reinforcing brand values and driving footfall 2
Flexible proposition and operations required to exploit favourable trends quickly 3
Multichannel essential 3
Table of Contents 4
Table of figures 4
summary 5
Characteristics of retail survivors 5
Characteristics of retail casualties 6
Action Points to safeguard businesses from downturns in economy 7
Build a distinctive, high profile brand 7
Identify and exploit trends - quickly 7
Innovate 8
Make cost efficiency a constant 8
Communicate 8
Have flexibility in the proposition 8
Be multichannel 8
analysis 9
Recession and overcapacity shake out the weakest 9
New factors for retailers to contend with in latest recession 10
Changing consumer mindset 11
Trends in retail casualties 12
Non-food biggest casualty 13
Food & grocery best performing sector 14
Health & beauty maintains its appeal to consumers 14
Clothing & footwear resilient despite casualties 15
Home sectors hit by fall in housing market 16
Books, music, video - changing radically 16
New attitude to space growth 18
Space more productive - even with online sales excluded 19
Outlook 21
New strategies will be needed in a slow growth environment 21
APPENDIX 23
Methodology 23
Further reading 23
Ask the analyst 23
Verdict consulting 23
Disclaimer 24
List of Tables
Table 1: Changes in retail space and expenditure 2009e on 2008 19
Table 2: Changes in space productivity - 2009e on 2004 20
List of Figures
Figure 1: Characteristics of retail survivors 2009 5
Figure 2: Common factors of retail casualties 2009 6
Figure 3: UK retail - impact of recession 2006-2009 9
Figure 4: UK retail and GDP growth 1969-2011e 10
Figure 5: Total retail inflation, volume, value growth 1989-2009e 10
Figure 6: Changing consumer mindset 2009 11
Figure 7: Timeline of casualties/administrations December 2007-March 2009 12
Figure 8: Total retail expenditure growth 2009e on 2008 13
Figure 9: Year-on-year sector growth 2009e on 2008 13
Figure 10: Space shift in the recession 2009 18
Figure 11: Increase in vacancy rates - H2 2009 on H2 2008 19
Figure 12: Online contribution to retail sales expressed as a per sq ft equivalent 1999-2009 20
Figure 13: Retail expenditure 2007-2013 21
Figure 14: Online retail expenditure 2003-2013 22
Figure 15: UK retail - the future 2010 and beyond 22
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