The return of the department store

One of the big surprises in UK retail has been the success of the department store sector, despite the economic downturn. Many expected a return to the kind of difficulties they were experiencing at the beginning of the last decade.

This is what we were saying back in 2001 and 2002:

"Department stores suffered from a loss of business in city centres as consumers showed their preference for the new-style shopping malls which provide convenience and accessibility." 

The Premium Market Report 2001"

Department stores no longer hold the monopoly on fine fragrance sales at Christmas and have significant competitors in Boots, The Perfume Shop and Superdrug. In addition, Sephora should not be dismissed from the equation, even though its expansion plans for the UK have been put on hold. Fine fragrance is widely available from a large variety of retailers, including supermarkets, and often at discounted prices. Department stores have therefore struggled to maintain a point of difference, particularly those which have gone down the discounting route without offering consumers a shopping experience they cannot get elsewhere. For example, The Perfume Shop has been refining its offer, investing in customer service and opening new stores and Superdrug has changed its retailing format over to open sell.”

The Premium Market Report 2002

Department stores were in danger of being seen as second-rate, due to lack of investment, declining footfall and an ageing demographic profile. In 2005, the closure of Allders, a well respected chain of department stores, sent alarm bells ringing through the retail industry, but may well have been the wake-up call other chains needed. The three largest, John Lewis, Debenhams and House of Fraser, have all undertaken substantial refurbishment and expansion programmes, and shaken off the fuddy-duddy image that department stores had long laboured under.

Today, many department stores are attractive places to visit. They also have a big advantage over many other high street retailers during the Christmas period: they offer pretty much everything under one roof.We are now witnessing a resurgence of department stores in premium beauty. We’ll be looking at this trend in more detail in this year’s Premium Market Report.