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Childrenswear Retailing in the UK | Verdict Sector Report; Market size, strategic issues and competitive outlook

Childrenswear Retailing in the UK | Verdict Sector Report; Market size, strategic issues and competitive outlook

Summary

The childrenswear market is set to grow by 2.8% in 2015; the same level of growth achieved in 2014, and only verygradual. The composition of growth is now very different from 10 years ago, when very rapid price deflation of 4.0% drove a 7.5% rise in volume. Inflation is easing, at just 0.1% in 2015 following a period of rising sourcing costs, ensuring that growth is now becoming more organic, with volume growth of 2.7% forecast for 2015. However, while value growth in the childrenswear market has recovered to pre-recession levels, volume growth has not as parents continue to purchase more carefully – a shift we saw throughout the downturn, which we expect to see maintained.

Key Findings

  • The tween and young teen markets represent the biggest opportunity in the UK childrenswear sector for retailers to exploit over the next five years, given they are the fastest growing children’s population segments to 2020 and yet there is currently little competition specifically targeting this audience. Retailers must concentrate on tailored ranges, appropriately interpreted fashion trends and focused marketing and social media initiatives in order to take advantage
  • Over 50% of school uniform shoppers are prepared to spend more on school uniform items if they are designed with technical attributes such as easy iron, scuff resistant (shoes), adjustable waists and stain-resistant fabric. As a standard offer, most retailers now provide permanent pleating and Teflon coating to prevent stains, but more premium features such as non-iron and scuff resistant coating on shoes would allow them to have a more tiered price architecture – encouraging trading up and higher spend per head.
  • Despite the largest proportion of childrenswear retailers being positioned in the midmarket, such as Gap Kids, M&S and Next, there is considerable polarisation in the market, with retailers in the value and premium sectors performing well, which is ultimately resulting in midmarket retailers being squeezed. The midmarket is trying to fight back with greater emphasis on value ranges such as Mother care's Value Essentials range, striving to offer shoppers lower prices but maintain quality, providing a differentiator to value retailers.
Synopsis

The UK childrenswear market 2010-2020 offers a comprehensive insight into the factors driving the market, the inhibitors, the major players performance, the main trends and consumer attitudes. It also forecasts to 2020.

It provides in-depth analysis of the following:
  • The Outlook
  • Recommendations
  • Market Size
  • Market Forecast
  • Channel Shares
  • Market Shares
  • Trends
Reasons To Buy
  • Understand which categories within childrenswear are forecast to outperform and how you can grow your share of spend in these markets.
  • Gain a better understanding on consumer shopping habits for back to school clothing, which retailers are most popular and how frequently back to school products are purchased, to enable you to better compete in this lucrative market.
  • Gain knowledge of the strategies for tapping into the Tween market which is due to be the fastest growing segment of childrenswear
  • Identify the opportunities to grow business in this sector by comparing strategies of the key players in the market and their performance metrics


  • EXECUTIVE SUMMARY
    • Key findings
    • OUTLOOK
      • Childrenswear spending growth to reach 2.8% in 2015
      • Deflation set to return, boosting volumes further
      • Fall in the birth rate hits younger childrenswear in the short term
      • Value players set to gain share but their advance will slow
      • Back to school market highly price competitive but quality to become more important
      • Online childrenswear market grows by 17.1% in 2014 to reach £682m
      • Online to account for four fifths of childrenswear growth in next five years
      • Demographic trends set to boost the tween clothing market
      • Mini-me trend given further impetus by social media
  • RECOMMENDATIONS
    • Focus online proposition on maximising customer convenience
    • Cater for more leisurely online shoppers as well
    • Make the most of the overlap between online and offline channels
    • Develop quality perceptions in back to school to sidestep price rivalry
    • Target the demand for second hand retailing
    • Restructure ranges to take advantage of demographic trends toward tweens
    • Build spend per head in lower age bands to counteract 2013 fall in birth rates
  • MARKET SIZE
    • Market definition and analysis
      • Table Childrenswear market definition, 2015
    • Clothing market summary
      • Womenswear outperforms all sectors between 2010 and 2015, but this is set to change
        • Table Summary of clothing sectors, 2015e
    • Childrenswear in context of the clothing market
      • Spend on childrenswear rises £518m in five years to 2015
      • Most resilient clothing sector by volumes
        • Table Childrenswear market value (£m) and growth drivers (%), 2005-15e
      • Subsector performance
        • Table Childrenswear sales breakdown and trends in context of clothing (£m), 2005-15e
    • Market price segmentation
      • Market dominated by fashion-focused clothing retailers
      • Expenditure breakdown of childrenswear market
    • Spend per head
      • Additional £8.87 spent on childrenswear in 2015
  • MARKET FORECAST
    • Childrenswear Expenditure Trends
      • Childrenswear to underperform all other clothing sectors
    • Market segmentation
      • Value share will grow the most over the next five years
    • Subsector performance
      • Girlswear
        • Table Girlswear expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Boyswear
        • Table Boyswear expenditure, inflation, volume and value and share of sector, 2015e-20e
      • Infantswear
        • Table Infantswear expenditure, inflation, volume and value and share of sector, 2015e-20e
    • Spend per head
      • £35 rise in spend per head forecast
      • Infantswear drives spend per head
    • Quarterly expenditure forecasts
      • 2014
      • 2015
      • 2016/17
      • Deflation returns in Q1 2016
        • Table Childrenswear expenditure (£m) and growth (%), quarterly, 2013-17e
  • CHANNEL SHARES
    • Clothing specialists and grocers gain ground
      • Childrenswear specialists remain under pressure
        • Table Childrenswear channels of distribution expenditure (£m) and share (%), 2014, 2015eand 2020e
      • Slow Mothercare recovery and specialists' fight against the grocers and clothing players lead to further share declines
      • Growing offers from smaller grocers Morrisons, Aldi and Lidl support grocers' share of spend
      • Despite gains from Amazon, the demise of mail order specialists leads to general merchandisers' fall
    • Online and offline
      • Convenience will drive online across all channels
  • MARKET SHARES
    • Childrenswear market shares
      • Next forecast to grow childrenswear share, maintaining lead and impacting M&S and Matalan
        • Table Specialist and clothing specialist childrenswear market shares (%), 2010-15e
        • Table Non-specialist childrenswear market shares (%), 2010-15e
      • Primark closes in on market leader Next
    • Winners and losers
      • Matalan loses share as poor womenswear collections lead to weaker childrenswear footfall
    • Key operating statistics
      • Sainsbury's drives densities via modern shop fits and attractive visual merchandising
        • Table Childrenswear retailers' key UK operating statistics, 2014/15e and 2015/16e
      • Space versus sales growth
      • Sales densities
  • TRENDS
    • Relevant Product Essential For Teen Market Success
      • Population growth
      • Competitive landscape
      • Product development
    • Babywear
      • Birth rates projected to rise in five years to 2020
      • Average age of mothers is increasing, boosting spend per head
      • Broad choice and a price-competitive offer ensure grocers remain popular among parents
      • Specialists must find a point of differentiation to regain lost ground
      • Midmarket womenswear players foray into babywear
      • Midmarket players must capitalise on gifting to drive spend
    • School Uniform Shopping Habits
      • While competitive prices are crucial, quality is more important
      • Consumer willingness to pay more for technical design features bodes well for retailers
      • Non-traditional players tap into school uniform market
      • Online now a major channel for uniform shopping
      • Shopper profile
      • Shopper spend
      • Online share of spend
      • Shopper frequency
      • Drivers of spend
      • Valued technical attributes in school uniform
      • Retailers visited
      • Items purchased
      • Retailer shares of items purchased
        • Table Purchased items at the leading school uniform retailers (%), 2015
      • Items purchased by retailer
      • Top July findings
      • Top August findings
      • Top September findings
    • Online Growth To Add Nearly £100m To Market In 2014
      • Pace of growth slows but is still rapid
      • Value segment still lags behind midmarket and premium sectors
      • Childrenswear online does not appeal as much as womenswear and menswear
      • ABC1s dominate socioeconomic profile of online childrenswear shoppers
      • Women and 25-44s are the main purchasers
      • Drivers of Spend
      • Price still important in buying online
      • Online sales channels
      • Nearly half spend under 30 minutes browsing before buying
  • APPENDIX
    • Methodology
      • Childrenswear market size and forecast methodology
      • Childrenswear retailer market share methodology
      • Clothing sales density methodology
      • Childrenswear spend per head methodology
    • Disclaimer

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