What: A review of UK department stores’ situation in early 2024.

Why it is important: We start hearing analysts mentioning that the pandemic was not responsible for the fall of previously iconic companies, which were structurally unfit for the new generation customers.

John Edgar, CEO of Fenwick, is overseeing a significant renovation of their flagship Newcastle store, including adding windows and opening up interior spaces. This £40 million project reflects a broader trend among department stores to reinvent themselves in response to challenges like online competition, reduced customer spending, and high operational costs. The department store sector has seen notable declines, with an average annual revenue contraction of 2.7% over five years to 2023.

Fenwick's effort is part of a wider industry movement where department stores must innovate or face extinction. Edgar emphasizes the importance of creating a unique shopping experience, moving away from competing solely on price. Other stores, like Fortnum & Mason, are focusing on creating engaging, thematic environments to attract customers. This shift comes as department stores, once staples of retail, grapple with changing consumer habits and the rise of online shopping.

Despite the challenging landscape, Fenwick remains optimistic, partly due to its family ownership which allows for a long-term perspective. However, the sector has seen its share of closures and hardships, as exemplified by Debenhams and House of Fraser. The future of department stores seems to hinge on their ability to provide unique, experiential shopping environments that differentiate them from both online retailers and each other.

Surviving UK department stores seek to avoid fate of fallen rivals