GLOBAL: The global department store market is set to grow by 22.2% to $100bn over the next five years, with China accounting for almost one-third (30%) of all global department store sales in 2019, according to a new retail forecast.
The Global Department Store Retailing report
from Verdict, the London-based research firm, expects this global growth to be boosted by a 38.1% rise in spend in China over the forecast period.
It states there are "extensive growth opportunities" in the country for retail "players" able to overcome rising labour costs and other overheads while also demonstrating a willingness to adapt and invest.
"Remaining players must further differentiate their offers through greater use of private label ranges, investment in in-store environment and brand exclusives to drive footfall and sales," added Verdict analyst Kate Ormrod.
Turning her attention to the performance of the major US store brands, Ormrod observed that Nordstrom and Macy's were the only two operators to have grown their global market share between 2009 and 2014.
She also praised Nordstrom, the upmarket fashion retailer, for its continued investment in innovation and its use of multichannel retailing while also attributing Macy's success – it is forecast to reach a 6.4% share in 2014 – to its product offer and store environment.
Sears and JC Penney, by contrast, came in for criticism, Sears for not investing in its stores, causing its market share to fall by 2.5%, and JC Penney for its changes in pricing structure and a proposition revamp. Ormrod suggested these changes had almost halved JC Penney's market share.
Data sourced from Verdict Retail; additional content by Warc staff
However, she also said she expected JC Penney to rebound in the long-term after benefiting from store refurbishments and its shop-in-shop concept, its plan to develop a collection of small units within its large department stores.