Variety Stores - UK - August 2004

Premier Insight

Executive Summary

Retail Sales

Sector Structure

Market Factors

The Consumer

Consumer Attitudes and Typologies

Retail Market Shares

Retailer Profiles

Retail Practices and Operational Issues

The Future

Forecast

Appendix 1

Appendix 2

Variety Stores - UK - August 2004

Table of Contents

Introduction and Abbreviations

Convenience Stores - UK - April 2012 -

Definitions

Research methodology

Consumer research

ACORN

Other research

Abbreviations

Premier Insight

Executive Summary

Increased competition on all sides

Mixed goods sales lag behind all retail sales

Sales by top ten variety retailers approach £22 billion

Sector characterised by large multiples with famous names

Mature brands reaching geographic saturation

Poundland achieves the fastest rate of outlet growth

Out-of-town locations beckon

Intense competition in many product categories

Supermarkets increasingly encroach on variety market

Main online competition from Amazon

Economic drivers largely positive

Employment factors more equivocal

Demographics dominated by ageing population

So we’re all middle class now?

Rising number of households to benefit those selling homewares

Boots the most highly-used store

Predominantly female audience

Value retailers increase their ABC1 appeal

Age does matter

Correlation with media usage

Supermarkets a major threat

ABs like bigger specialist ranges

Specialists stealing WH Smith sales, but Boots faces widespread competition

Woolworths and Wilko valued for convenience

M&S damaged by perceptions of poor value and uninspiring clothing

Attitudes towards value for money, home shopping

Encouraging loyalty and impulse buying

M&S makes one third of sector sales

Supermarkets the scourge of Boots

Argos strengthens but Woolworths can only maintain share

WH Smith facing up to specialist competition

Poundstretcher falls behind other value retailers

Main developments at individual retailers

Argos focused on growth markets

Bhs has improved since takeover by Philip Green

Boots the Chemists developing three distinct store formats

Littlewoods/Index struggles to maintain sales

M&S strives to return to basic values

Poundland growing rapidly and expanding own-brands

Poundstretcher benefits from new management

WH Smith updating dowdy image

Wilkinson proves that high street variety retailing can be successful

Woolworths partially withdraws from out-of-town retailing

Prospects for variety retailers

Retail Sales

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All retail sales

Figure 1: All retail sales, at current and constant 2000 prices, 1998-2004

Sales through non-specialist non-food retailers

Figure 2: Sales through non-specialist non-food retailers, at current and constant 2000 prices, 1998-2004

Sales through leading UK variety retailers

Figure 3: Sales through leading UK variety retailers, 2000-04

Figure 4: Retail sales by leading UK variety stores, 2000-04

Sector Structure

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Leading multiples

Figure 5: Leading variety store retailers, UK outlet data, 2000-04

Competition intensifies in many categories

Other variety retailers

Market Factors

Economic trends

PDI and consumer expenditure

Figure 6: PDI, savings and consumer expenditure, at current prices, 1999-2009

Housing market

Figure 7: House prices, number of house sales and interest rates, 1999-2009

Employment trends

Figure 8: Structure of the working population, by gender, 1998-2009

Social and demographic trends

Figure 9: Total UK population, by age group, 1999-2009

Socio-economic factors

Figure 10: UK adult population (aged 15+), by socio-economic group, 1999-2009

Number of households rising but average size in decline

Figure 11: Number and size of UK households, 1999-2009

Impact of marriage and divorce rates

Figure 12: Number of births, marriages and divorces, 1999-2009

Car use and out-of-town shopping

The Consumer

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Critical consumer findings

Browsing versus purchasing

Figure 13: Browsing versus purchasing at leading UK variety stores, May 2004

Figure 14: Browsing and purchasing from variety stores in the past six months, May 2004

Analysis of characteristics of purchasers

Figure 15: Variety stores where anything bought in the past six months, by gender, age and socio-economic group, May 2004

Figure 16: Variety stores where anything bought in the past six months, by gender, age and socio-economic group, May 2004

Figure 17: Variety stores where anything bought in the past six months, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 18: Variety stores where anything bought in the past six months, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 19: Variety stores where anything bought in the past six months, by region and ACORN categories, May 2004

Figure 20: Variety stores where anything bought in the past six months, by region and ACORN categories, May 2004

Figure 21: Variety stores where anything bought in the past six months, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 22: Variety stores where anything bought in the past six months, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Consumer Attitudes and Typologies

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Critical consumer findings

Value for money and interest in home shopping services

Figure 23: Summary of variety stores findings, May 2004

Key demographic differences

Value for money

Home shopping service

Number of variety stores used for purchasing

Figure 24: Number of variety stores used for purchase in the past six months, May 2004

How successfully do the main stores attract their target market?

Figure 25: CHAID analysis of leading variety stores, May 2004

Which variety stores attract similar groups of customers

Figure 26: Correlation analysis of variety stores shoppers, May 2004

Figure 27: Variety stores shoppers that also shop at Argos, Bhs, Boots, Index and M&S, May 2004

Figure 28: Variety stores shoppers that also shop at Poundland, Poundstretcher, WH Smith, Wilkinson Hardware and Woolworths, May 2004

Best value-for-money variety stores

Figure 29: Variety stores offering the best value for money, by variety stores browsed in the past six months, May 2004

Figure 30: Variety stores offering the best value for money, by variety stores browsed in the past six months, May 2004

Interest in home shopping services

Figure 31: Variety stores where shoppers would use a home shopping service, by variety stores browsed in the past six months, May 2004

Figure 32: Variety stores where shoppers would use a home shopping service, by variety stores browsed in the past six months, May 2004

Consumer attitudes towards variety stores

Figure 33: Attitudes towards variety stores, May 2004

Shopping patterns at variety stores

Figure 34: Attitudes towards variety stores, by gender, age and socio-economic group, May 2004

Figure 35: Go to variety stores less frequently because I pick up many of the items they sell at supermarkets, by Mintel’s Special Groups, May 2004

Range issues

Figure 36: Attitudes towards variety stores, by gender, age and socio-economic group, May 2004

Figure 37: Prefer ranges of a specialist and don’t mind limited range if can get low prices, by lifestage, May 2004

Marks & Spencer and Bhs

Figure 38: Attitudes towards variety stores, by gender, age and socio-economic group, May 2004

Woolworths, Wilkinson, Boots and WH Smith

Figure 39: Attitudes towards variety stores, by gender, age and socio-economic group, May 2004

Figure 40: Attitudes towards shopping and shopping behaviour at Boots and WH Smith, by Mintel’s Special Groups, May 2004

Attitudes towards variety stores among browsers of stores

Figure 41: Attitudes towards variety stores, by stores browsed, May 2004

Figure 42: Attitudes towards variety stores, by stores browsed, May 2004

Retail Market Shares

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M&S makes a third of sector sales

Figure 43: Market shares of leading UK variety retailers, 2000 and 2003

Figure 44: Market shares of leading UK variety store retailers, 2003

Boots loses out to supermarkets

Argos gains momentum but Woolworths wobbles

WH Smith sorts its shelves

Discounters in the ascendant

Shares slide in the middle market

Retailer Profiles

Department Store Retailing - UK - March 2012 -

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Argos

Figure 45: Argos, outlet data, 2000-04

Figure 46: Argos, financial performance, 2000-04

Figure 47: Argos, online sales, 2002-04

Bhs

Figure 48: Bhs Limited, outlet data, 2000-03

Fast fashion stirs the hangers

New focus on homewares

Figure 49: Bhs Limited, financial performance, 2000-03

Bhs Group results

Boots the Chemists

Figure 50: Boots the Chemists, outlet data, 2000-04

Figure 51: Boots Group plc, financial performance, 2000-04

Littlewoods/Index

Figure 52: Littlewoods, outlet data, 1999-2003

Figure 53: Littlewoods Ltd, financial performance, 1999-2003

Marks & Spencer

Figure 54: Marks & Spencer, outlet data, 2000-04

New format development

Store refurbishment

Figure 55: Marks & Spencer UK retail product mix, by allocation of selling space and proportion of turnover, 1998-2004

Figure 56: Marks & Spencer, financial performance, 2000-04

Figure 57: Marks & Spencer, like-for-like sales performance, 2003-04

Clothing sales

Poundland

Figure 58: Poundland Limited, store numbers, 2000-04

Figure 59: Poundland Ltd, financial performance, 2000-04

Poundstretcher

Figure 60: Brown & Jackson plc, outlet data, 2000-04

Instore heralds a move to the mass market

Figure 61: Development of the Instore format, 2003-04

Figure 62: Brown & Jackson plc, financial performance, 2000-04

WH Smith

Figure 63: WH Smith plc, UK retail outlet data, 1999-2003

Figure 64: WH Smith plc, UK retailing, financial performance, 1999-2003

Wilkinson Hardware Stores

Figure 65: Wilkinson Hardware Stores Ltd, outlet data, 2000-04

Figure 66: Wilkinson Hardware Stores Ltd, financial performance, 2000-04

Woolworths

Figure 67: Woolworths Mainchain and Big W, outlet data, 2000-04

Figure 68: Woolworths plc, financial performance, 2001-04

Figure 69: Woolworths and Big W retail chains, financial performance, 2000-03

Retail Practices and Operational Issues

Housewares Retailing - UK - October 2009 -

Current trading and outlook

Figure 70: Leading variety stores, recent trading performance, 2002/03 or 2003/2004

Christmas 2003 trading

Performance of key product sectors

Tough conditions in clothing

Highly competitive housewares

Contesting confectionery

Supermarkets improving health and beauty

Other product categories

Deflation rules in many sectors

Targeting of key customer groups

Internet shopping limited

Brand strategies in the variety sector

Can service make a difference?

Will variety retailers remain on the high street?

New formats aplenty

Advertising and promotional strategies

Loyalty schemes limited

New entrants to the mixed goods arena

The Future

Factors likely to influence future performance

Supermarkets and specialists will continue to squeeze variety store sales

Responses to competitive pressure

Demographic drivers

Socio-economic factors

Who are likely to be the winners and losers?

M&S solid but no longer an icon

Resuscitation required at WH Smith

Boots future based on tailored formats and own-brand development

Mixed prospects for value retailers

Future unclear for Littlewoods and Index

Few potential new entrants except supermarkets

Forecast

Solid growth predicted

Figure 71: Forecast total retail sales of UK variety stores, 2004-09

Figure 72: Forecast retail sales of top ten variety store chains, 2004-09

Factors incorporated

Appendix 1

Figure 73: Variety stores browsed while out shopping in the past six months, by gender, age and socio-economic group, May 2004

Figure 74: Variety stores browsed while out shopping in the past six months, by gender, age and socio-economic group, May 2004

Figure 75: Variety stores browsed while out shopping in the past six months, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 76: Variety stores browsed while out shopping in the past six months, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 77: Variety stores browsed while out shopping in the past six months, by region and ACORN category, May 2004

Figure 78: Variety stores browsed while out shopping in the past six months, by region and ACORN category, May 2004

Figure 79: Variety stores browsed while out shopping in the past six months, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 80: Variety stores browsed while out shopping in the past six months, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Appendix 2

Figure 81: Variety stores offering the best value for money, by gender, age and socio-economic group, May 2004

Figure 82: Variety stores offering the best value for money, by gender, age and socio-economic group, May 2004

Figure 83: Variety stores offering the best value for money, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 84: Variety stores offering the best value for money, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 85: Variety stores offering the best value for money, by region and ACORN category, May 2004

Figure 86: Variety stores offering the best value for money, by region and ACORN category, May 2004

Figure 87: Variety stores offering the best value for money, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 88: Variety stores offering the best value for money, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 89: Variety stores where shoppers would use a home shopping service, by gender, age and socio-economic group, May 2004

Figure 90: Variety stores where shoppers would use a home shopping service, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 91: Variety stores where shoppers would use a home shopping service, by region and ACORN category, May 2004

Figure 92: Variety stores where shoppers would use a home shopping service, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 93: Attitudes towards variety stores, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 94: Attitudes towards variety stores, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 95: Attitudes towards variety stores, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 96: Attitudes towards variety stores, by presence of children, lifestage and Mintel’s Special Groups, May 2004

Figure 97: Attitudes towards variety stores, by region and ACORN category, May 2004

Figure 98: Attitudes towards variety stores, by region and ACORN category, May 2004

Figure 99: Attitudes towards variety stores, by region and ACORN category, May 2004

Figure 100: Attitudes towards variety stores, by region and ACORN category, May 2004

Figure 101: Attitudes towards variety stores, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 102: Attitudes towards variety stores, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 103: Attitudes towards variety stores, by media, source of regular grocery shopping and commercial TV viewing, May 2004

Figure 104: Attitudes towards variety stores, by media, source of regular grocery shopping and commercial TV viewing, May 2004