Premium operators are driving growth in the £14.7bn UK department store sector. The latest findings from the Datamonitor group’s Verdict Research revealed that sales for luxury operators grew by 11.3% last year.
The growth is being driven by Harrods, Selfridges and Harvey Nichols, who have been collectively outpacing the overall department store sector by a significant margin for the past six years. Growth among the rest of the department stores last year was 2.7%. Overall, the sector grew by 3.5%, with 2008 predicted to increase by 4.1%.
Extensive store openings planned for the year by Marks & Spencer, John Lewis, Debenhams and House of Fraser, together with continued consumer spending with premium operators, are expected to help drive this growth.
Maureen Hinton, lead retail analyst at Verdict Research, says: “As money becomes tighter, consumers are more selective about where they spend, and are more in need of a rewarding and indulgent shopping experience to lighten their mood.”
The upswing will be in stark contrast to the slowdown in the sector experienced in 2004 and 2005 as a result of a weak performance from Marks & Spencer, together with the exit of struggling players such as the Allders chain.
In terms of market share in 2007, Marks & Spencer remained in the lead with 31.8% of the market, followed by John Lewis (19.1%), Debenhams (16.7%), House of Fraser (8.7%), Selfridges (5.1%), Harrods (5.1%), Fenwick (2.8%), TJ Hughes (2%), Harvey Nichols (1.6%), and Beales (0.9%).