Slow sales: Competition from supermarkets and online retailers has limited growth

Operators in the Department Stores industry have had to contend with strong competition from online-only retailers, volatile trading conditions and widespread discounting over the past five years. However, the industry as a whole continued to grow throughout the period, albeit at a slow rate. Consumer confidence rebounded and economic conditions improved strongly in the first half of the period, to the benefit of the industry. However, consumer confidence fell in 2016-17 and weakened further in 2017-18 as a result of uncertainty stemming from the EU referendum. The industry also continues to face intense external competition from online-only retailers and the expansion of supermarkets into non-food more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Strong pricing pressure from external rivals has weighed on industry revenue in recent years
  • Department stores are attempting to compete with external companies by offering exclusive ranges
  • Department stores are expected to increase their focus on online operations to remain competitive
  • Industry Report - Starting a New Business Chapter

    The Department Stores industry has high barriers to entry. Although it is relatively easy to open a discount variety store, department stores are not easy to set up. Renting a large building, obtaining fixtures and fittings, hiring workers, and acquiring sufficient stock make set-up costs quite high. With such prohibitive start-up costs, entering the industry is not easy.The location of a store can make or break a business in the industry. To be successful, a new entrant would need at least one high-street shop, and rental prices in such locations are expensive. Acquiring stock could also prove difficult for potential entrants. The established players in the industry have access to economies of scale and can pay lower prices because they purchase products in bulk. Ret...purchase to read more.

    Additional Insights for the Department Stores Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Department Stores Industry are

  • Ability to alter goods and services produced in favour of market conditions
  • Access to secure revenues
  • Marketing of differentiated products
  • IBISWorld analysts also discuss how external factors such as Real household disposable income and Demand from supermarkets in the Department Stores industry impact industry performance..

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    What's in this report

    What is the Department Stores Industry?

    Department stores retail a wide range of general merchandise, including clothing, household appliances, toys, games, personal-care products and garden equipment. Non-specialised stores that primarily sell food are classified as supermarkets and are not included in the industry.

    Industry Products
  • Clothing
  • Food
  • Accessories
  • Health and beauty products
  • Household items and furniture
  • Games and toys
  • Electricals
  • Books and all other products
  • Industry Activities
  • General merchandise retailing
  • Clothing retailing
  • Food retailing
  • Household goods retailing
  • Game and toy retailing
  • Consumer electronics retailing
  • Personal-care product retailing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household disposable income
  • Demand from supermarkets
  • Total online expenditure
  • Demand from clothing retailing
  • Consumer confidence index

  • Current Performance
  • External threats
  • Uncertain environment
  • New products and ranges
  • Added convenience
  • Black Friday
  • Chart: Revenue Growth

  • Industry Outlook
  • Continued pressure
  • Advancing online
  • Destination shopping
  • Profit performance
  • Table: Department Stores Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Department Stores Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Clothing & Footwear Wholesaling
  • Electronic & Telecommunications Equipment Wholesaling
  • Furniture, Carpet & Lighting Wholesaling
  • Household Appliance & Television Wholesaling
  • Perfume & Cosmetics Wholesaling
  • Pharmaceutical Wholesaling

  • Products & Services
  • Clothing
  • Health and beauty products
  • Household items and furniture
  • Accessories
  • Electricals
  • Games and toys
  • Books and all other products
  • Food
  • Chart: Department Stores Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged between 45 and 64
  • People aged between 30 and 44
  • People aged between 15 and 29
  • People aged 65 and over
  • Chart: Major Market Segmentation for the Department Stores Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesRentDepreciationAdvertising and other costs
  • Chart: Cost Structure Benchmarking – Sector vs Department Stores

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Department Stores Industry

  • Industry Globalization
    John Lewis Partnership plc, Marks and Spencer Group plc, Debenhams plc, Harrods Ltd,
  • Table: John Lewis Partnership plc - financial performance
  • Table: Marks and Spencer Group plc - financial performance
  • Table: Debenhams plc - financial performance
  • Table: Harrods Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Department Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Department Stores Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • Describes a store with a physical building and a high-street presence.
  • Footfall
  • The number of people visiting a store over a period of time.
  • Multichannel Retailing
  • Using different methods to market a firm's product to the consumer. These avenues can include the web, social media, retail stores and email.
  • Specialised Stores
  • Stores that sell one product or a range of similar products such as clothing.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Department Stores market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Department Stores:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Department Stores market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Department Stores, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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