Spotlight: Retail Myths Exploded

Retail Myths Exploded
 
Retail Myth Four

21 September 2015, words by Marie Hickey

Only value retailers are expanding.

 

Value retailing has certainly stolen the limelight since the downturn helped by lower consumer confidence, the associated changes in shopping behaviour and retailers ability to capitalise on the large portfolios that became available due to administrations.

As a result value retailers have altered the UK retail landscape rapidly and comprehensively with almost a quarter of them now having portfolios greater than 100 stores.

Value, however, has not been the only part of the retail market that has expanded. Figure 3 details the change in average portfolio size across the various retail sectors and product classifications since 2009.

FIGURE 3

Change in portfolio and total store count by sector and product

 
Figure 3

Source: Savills Research

Mass convenience retailing, including names such as Greggs and Holland & Barrett, has seen the largest increase in average portfolio count, increasing by 33 to 315 stores. On a broad sector basis, however, Value retailing stands out with robust expansion across all subsectors with total store expansion of 15.1%.

This increase in total store count, however, has been outpaced by the 16.8% growth reported for the Aspirational retail sector albeit from smaller average portfolios.

 

"In light of improving economic conditions we expect the Aspirational retail sector will continue to expand"

Tom Whittington, Savills Research

Fashion brands within the Aspirational sector have been expansive with a 574 increase in total store count since 2009, although average portfolios have only increased by four over the same period. Even within the Aspirational Comparison goods subsector, which on the whole has shrunk since the downturn, there have been a number of specialists that have performed very well and in turn grown their portfolios accordingly; Cath Kidston, Hotel Chocolat and Lakeland have all grown their store network by at least 50% since 2009.

In light of improving economic conditions we expect the Aspirational retail sector will continue to see growth. We are already aware of a number of retailers within this segment, such as White Stuff, Hotter Shoes, Carluccio's and Côte who aspire to have store portfolios in excess of 100. There are many more, given the opportunity, who would also like to expand in order to better penetrate the UK market.

 

 
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Key Contacts

Marie Hickey

Marie Hickey

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 3320 8288

 

Tom Whittington

Tom Whittington

Director
Retail Research

Savills Manchester

+44 (0) 161 244 7779