RETAIL INDUSTRY

Retail industry

Executive Summary1

Retail Market Overview2

Importance of Clothing Sector3

Size and Growth of Clothing Sector3

Trends in Clothing Sector4

Key Challenges in Clothing Sector5

New Forms of Cloth Retailing5

Retailing and Ecommerce5

Social Networks and Retailers6

Mobile Commerce6

Investment, Innovation and R&D6

Economics of Retailing7

Characteristics of Consumers8

Competition in Retailing8

Pricing8

From recession to recovery9

Policy, Regulation and Legislation10

Employment Structure10

Mergers and Acquisitions11

Global Competition11

Future Outlook12

Conclusion12

References14

Appendices19

Executive Summary

The retail industry of UK has gone through many changes. This industry is estimated to grow by about 15% in the coming five years. The main reason behind this slow growth rate is that the cost of credit along with the operating cost is expected to increase. The size of retail market of UK specifically the clothing sector has increased due to the inclusion of big players such as the Next, Littlewoods and Marks & Spencer.

The largest sector in the cloth retailing market is the women's clothing sector. The sales declined tremendously as a result of economic crisis of 2009. Though the industry is recovering, it has not been able to reach its full potential. The trends in the clothing sector have been changing due to the increased level of interest of consumers in fashion labels. The clothing market is also facing the problem of saturation because the sales volume has started to exceed the demands of the consumers.

This sector faces many challenges that the retailers need to address to sustain their market share. As the sector consists of mostly SMEs, it creates challenge for the retailers in terms of lack of availability of resources.

Retail Industry

Retail Market Overview

The retail market in UK has undergone significant changes. The consumers have become more sophisticated and demanding. The consumers want to compare and buy products online along with the comfort of collecting, returning or buying the products in store. The occupational environment and the retail investment have faced many challenges on the last year. It is because the confidence of both the retailer and the consumer was shaken by the impact of debt crisis in Europe and austerity at home. The investment in retail industry was low as compared to the ten year average which reflected the weakening in the appetite of investors. Therefore, the retailers are trying to increase store portfolio in the retail properties that will provide the best combination of flexibility, affordability, environment and location (www.britishland.com).

The retail market is said to increase by 15 percent in size in the next five years. This shows a slower growth rate and the cost of credit along with the operating costs are also expected to rise (www.ofgem.gov.uk). The companies that will not be able to compete with the shrinking margins will have to suffer. The increase in interest rate, consumer debt, house prices and inflation will affect the shopping patterns of people. It is because the confidence of people will be shaken due to these problems and if they are worried about their financial security, they will tend to spend less (www.prospectsnet.com). In order to further understand the retail industry refer to the appendices ...