Maureen Hinton, retail practice leader at research body Verdict, presented BHETA members with Verdict’s latest analysis of the state of the retail market.
The report majored on DIY, garden and housewares sales and included forecasts to 2015.
Hinton said retail sales growth having halved each decade over the last four decades and the low price; high volume culture of the past decade being reversed with the return of inflation. To these difficult trading conditions were added falling consumer confidence; non-store shopping increasing by almost 72 per cent as the multichannel retail culture becomes the norm, and a lack of buoyancy in the housing market.
In market specific analysis, this scenario had led to a £0.7 billion drop in DIY and garden sales since 2008, with the decrease in DIY far outweighing that of garden sales, with gardening boosted by the grow your own trend, and a £0.18 billion fall in the housewares market.
Here the big losers were glass and crockery, small electrical items and bathroom and table linen while better times were being enjoyed by among others kitchen utensils, attributed to the home baking trend.
In all three sectors – DIY, garden and housewares - the only really positive trends were a renewed consumer appreciation of ‘value’- in many cases as distinct from ‘cheap’ - and the increase in non-food space available in supermarkets. Winning retailers included Wickes and Wilkinsons as well as the major supermarkets.
In terms of the next four years to 2015, the Verdict analysis saw difficult times persisting until 2013/2014 until the emergence of what it described as ‘the new normal’ – a low growth environment and wins coming from taking share from competitors rather than an overall expansion of the market.
With the housing market picking up in 2013 and disposable income recovering a little by 2014, retail sees a return to slightly better times – but only as defined by the so-called ‘new normal’.
In housewares, some recovery is predicted sooner than in DIY/garden thanks partly to house moves and home baking, but also to the contribution of the newer retail players in the sector such as Next and T K Maxx, as well as department stores.
In both sectors the accent on value will remain strong and manufacturers will need to place their emphasis on adding value, developing both customer and supplier loyalty and maximising their ability to service or provide multichannel routes to the consumer.
E-retail will rise from its current 8.9 per cent share to a 12 per cent share of retail overall while m-commerce hits 1 per cent of retail sales for the first time.