UK Retail Trends 2007

Publication Date	February 2007
Publisher	Verdict
Product Type	Report
Pages	28
ISBN Number	not applicable
Product Code	VDT00197

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Summary

Introduction

Verdict Research: The final quarter of the calendar year is the key trading period for the majority of UK retailers. The trends that emerged during Q4 2006 are ones that will influence all retailers in 2007. This retail brief analyses trends and performances from Christmas 2006 and highlights key issues for retailers in 2007. It also includes retail and sector growth forecasts. Scope The briefing provides an invaluable summary of performance in Q4 2006, with retail sales per month, growth rates, volume and inflation levels. It features like-for-like performance of the major retailers during the important Christmas trading period and analyses the trends that emerged. Against this backdrop it provides spending forecasts for 2007 in retail overall, individual sectors and online, and the issues retailers face. The briefing also includes an analysis of property issues and the effect on retailers and landlords in the light of recent casualties. HighlightsShoppers spent an extra 2. 9bn in Q4 2006, 37. 9% of the total annual growth in the sector (7. 7bn), demonstrating how important this quarter was in driving growth for the year. Inflation is returning to the market. In Q4 2005 volume drove growth, but for the first time in six years there was no deflation in Q4 2006. Food & grocery prices were the main influence on inflation, but there is strong evidence of consumers trading up to higher price points across other sectors too as they become inured to low prices. An online facility is essential. Verdict estimates that consumers used the Internet to order an extra 1bn worth of products in Q4 2006, a 40% increase on 2005. Growth in 2007 will produce an extra 4bn through online shopping and retailers who ignore this channel do so at their peril. Reasons to Purchase Be prepared for 2007 with this comprehensive, yet compact overview of UK retail growth, sector and channel performance and forecasts for 2007. Use insight into the environment faced by retailers in 2007 and changing buying and seasonal habits to influence developing retail strategies. Use Verdict's analysis of the key trends in 2007 to develop the most efficient contemporary retail models and avoid the pitfalls of weak operators.

Content

Verdict View
Catalyst
Summary
Analysis
- Key Trends Emerging from Christmas 2006
- Retail Sales in Q4 2006 - A strong quarter that ends on a high.
- Sector Trends
- Food & Grocery - premium products popular
- Electricals - New technology driving growth, but margins under pressure
- Music & Video - High volume sales, but heavy price competition
- Health & Beauty - Premium products boost sales
- Homewares - Price pressures
- Clothing & Footwear - Managing expectations
- Miscellaneous retailers - Generally positive results
- Channel Trends
- Anything, anytime, anywhere
- Online - Consistently outperforming
- Supermarkets - multi-format, multichannel, customer focused
- Department stores - Premium choice and variety ...
- 2007 Forecast
- Retail Background - Challenging environment
- Retail spending - growth slowing
- Per capita spend - price and volume growing less important
- Sector performance varies
- Property Issues
- Rental levels still high despite insolvencies
- Smaller units hard to shift
- Outlook Key Retail Issues for 2007
- Challenging year ahead
- Efficient model key
- Demand-, not supply-led
- Online facility essential
- Shopping is time sensitive - availability, delivery and service key issues
- New approach to seasonality
- Consumers trading up - but need convincing .
- Christmas 2007 - up against tough comparative
Verdict View
Catalyst
Summary
Analysis
- Key Trends Emerging from Christmas 2006
- Retail Sales in Q4 2006 - A strong quarter that ends on a high.
- Sector Trends
- Food & Grocery - premium products popular
- Electricals - New technology driving growth, but margins under pressure
- Music & Video - High volume sales, but heavy price competition
- Health & Beauty - Premium products boost sales
- Homewares - Price pressures
- Clothing & Footwear - Managing expectations
- Miscellaneous retailers - Generally positive results
- Channel Trends
- Anything, anytime, anywhere
- Online - Consistently outperforming
- Supermarkets - multi-format, multichannel, customer focused
- Department stores - Premium choice and variety ...
- 2007 Forecast
- Retail Background - Challenging environment
- Retail spending - growth slowing
- Per capita spend - price and volume growing less important
- Sector performance varies
- Property Issues
- Rental levels still high despite insolvencies
- Smaller units hard to shift
- Outlook Key Retail Issues for 2007
- Challenging year ahead
- Efficient model key
- Demand-, not supply-led
- Online facility essential
- Shopping is time sensitive - availability, delivery and service key issues
- New approach to seasonality
- Consumers trading up - but need convincing
- Christmas 2007 - up against tough comparative
- Figure 1: Q4 2006 Volume Growth %
- Figure 2: Online retail sales growth 1998 -2007e
- Figure 3: Online sales 1997-2007e
- Figure 4: Retail Spending 1997-2007e
- Figure 5: Retail spend per head 1997-2007e
- Figure 6: Forecast growth rates per sector 2007e
- Figure 7: Consumer demand's effect on retail 2007