What: A review of the UK market which somehow gives a good understanding, if not comprehensive of the situation in the country.

Why it is important:  There is no mention of the increasing gap between regions and the city of London when it comes to luxury stores (Selfridges, Harvey Nichols and, to a certain extent, Fenwick) nor of the notion of “destination” stores, which might be very well the future for many department stores in Europe. In spite of these limitations, the report provides a fair amount of data and numbers.

According to Coresight, UK department store sales are expected to reach £11.4 billion ($13.8 billion) in 2023, with a growth of 2.9% compared to 2022.

The department store sector is dominated by three major mass market players (John Lewis, Marks & Spencer, House of Fraser) and two luxury stores (Harrods, Selfridges), with a total of 325 stores across the five major retailers.

The number of stores has declined by 43.5% since 2015 (this includes the closure of all 124 Debenhams stores) and major department stores are optimizing their store portfolio by opening smaller format stores and investing in private label, rental, resale, repair and sustainability services, digital apps and personalization.

Regarding the market specificities:

-    High inflation is affecting discretionary spending, leading consumers to seek value with private labels and trade down from mass market stores.

-    The return of international tourism and a resilient luxury consumer will support growth in luxury stores, notably Harrods and Selfridges.

-    The UK department store sector is expected to continue optimizing store fleets and making investments in virtual selling and livestreaming, particularly to reach a younger customer base.

Nearly all retailers have embraced circular services including rental and resale, with Selfridges looking the best positioned in this space as it is currently trying to incorporate circularity into its entire business.

There is no mention of either Fenwick, Harvey Nichols or Liberty.

An outlook of the UK department store market