Channels of Distribution Clothing Retailing UK

                          

Clothing Retailing - UK -

Channels of Distribution

Clothing specialists dominate the clothing market and the balance of power is relatively unchanged since 2006. Nevertheless from a much lower base we estimate that grocers and home shopping (including internet specialists) gained ground at the expense of department stores.

FIGURE 20: UK: Clothing market – channels of distribution, 2006 and 2008

Channel	2006	2008
	%	%
Clothing specialists (a)	69	68
Department/other mixed goods stores	9	8
Grocers	7	8
Home shopping (b)	5	6
Other (c)	10	10
Total	100	100

(a) Includes M&S and Debenhams
(b) Includes mail order, direct selling and internet specialists
(c) Includes sports specialists, garden centres, markets, gift shops, charity shops

SOURCE: Mintel

Specialists

Based on the national statistics data, the specialists include Marks & Spencer and Debenhams. We have adjusted the data to exclude our estimate of non-garment sales. The largest elements here are the food sales of M&S along with footwear and accessories sales sold by many apparel specialists.

With a number of the largest and most price competitive players operating in this channel it has been hard for the specialists to hold onto market share but they have ceded very little ground.

Department stores struggle to maintain market share

Clothing is at the core of most department store offers and they have continued to invest in new brands and ideas through the recession. Even John Lewis, a company known for its household goods, has upped its fashion game recently, launching a dedicated online apparel store accessed via its main website. The store offer has also been reinvigorated with new brands and a revamped marketing strategy featuring models Karen Elson and Matthew Avedon is conveying these changes to the consumer.

Harvey Nichols is about to unveil a young fashion department in the flagship Knightsbridge store and test some fashion basics on its website. Young fashion will replace gifts and other lifestyle lines and will target a more recession-proof customer with high levels of disposable income.

But department stores have lost market share in the last few years. Clothes retailing has become highly commoditised and price-led, and our consumer research shows that the 25-54 age group has traded down the most in the recession and they are core department store shoppers.

Other mixed goods retailers (which include names like Boots, Wilkinsons, Poundland) are also included in this category, but their importance in clothing is very marginal.

Grocers catch up with department stores

The grocers have been one of the big driving forces in the sector with Asda and Tesco both continuing to undercut many high street retailers on price without compromising on fashion.

Asda’s success with the George brand is well established and the company has developed a number of other sub-brands. But Tesco has closed the gap fast since entering this category and now has several own brands too including Florence & Fred, Tesco Value, True, Charmed and One Body. It also holds the UK licence for the Cherokee brand. After such rapid growth Tesco’s like-for-like sales declined by 2% in 2008, but better club card promotions and stronger childrenswear sales saw apparel growth return in early 2009.

Sainsbury’s was the last of the big three grocers to introduce a full fashion offer, launching its Tu brand in 2004. Other grocers sell some basics but their sales are tiny by comparison.

The big three are all ramping up their fashion exposure through online development. Asda unveiled its full online launch for George in Autumn 2008 and Tesco has just re-launched its fashion site www.clothingattesco.com. Sainsbury’s has similar plans for 2010.

Home shopping

This channel includes catalogue retailers, direct sellers, TV shopping and the internet pure players. The last of these is still tiny in the context of the clothing market, but Asos, Net-a-Porter and Figleaves are three of the better known operators. eBay has always been a popular site for clothing especially for young people and Amazon now has a growing range of mostly casual clothes including premium brands like Diesel, Firetrap and Timberland. Amazon is also looking to build on the Javari brand (beta phase) for shoes and bags.

Meanwhile the big book catalogues have consolidated and sales are finally starting to stabilise with Shop Direct Group setting the pace in terms of new initiatives including the launch of Very.co.uk. There has been growth from smaller specialist catalogues many of which focus on fashion and target the more mature shopper. At the older end of the age spectrum N Brown goes from strength to strength.

Others

There is a wide range of other outlets selling clothing and specialist sports shops being the largest. Garden centres also stock a growing range of casual clothing mostly targeting its core middle-aged customers. Markets are an important channel for remaindered goods, though they therefore contribute more to volume sales than to value. Charity shops and other second hand stores have experienced increased demand in the recession but have also been struggling to stock their shops.

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