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Value Clothing Retailing - UK - December 2009

The value clothing market is continuing to grow strongly, up an estimated 6% in 2009 to £8.1 billion. With a similar growth rate in 2008, sales of value clothing have not been dented by the consumer downturn.

Specialist fashion discounters (led by Primark, TK Maxx and Matalan) are the main beneficiaries of the strong growth in value clothing sales, and have seen their sales rise by 7% to £5 billion in 2009.

With 18m adults (ie over a third) buying clothing at Primark in the last year, this is now the UK’s most popular value clothing chain. Although the retailer has lost ground among more affluent consumers (ABs), it has picked up less well-off consumers (C2s) – probably those same shoppers lost by the supermarkets.

Consumer perceptions of product quality may be a growing issue. Only 8m consumers agree that the quality of value clothing is as good as in other clothing stores, down significantly from 2007. .

The shopping experience in the value clothing market is also an issue: less than 4m consumers find the experience pleasurable, pointing to the need for better design of fixtures, more space and better lighting. to improve the environment in which consumers are buying.

Value clothing stores will benefit from the rising number of 25-34-yr olds over the next five years as people in this age group are avid value fashion purchasers: only 2% never shop at value clothing retailers.

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Table of contents

  1. Issues in the Market

      • Main themes
        • Definitions
          • Abbreviations
          • Future Opportunities

            • Capitalising on consumers’ willingness to trade down
              • Better, and cheaper
                • Fostering the Bargain-hunting mentality
                  • The thrill of the chase
                    • Simplifying the shopping experience
                      • As easy as ‘price’, ‘fabric’, ‘wash’
                      • Market in Brief

                        • Value clothing worth £8.1 billion
                          • Supermarkets fall back while Primark leads
                            • Downturn helps to boost the market
                              • Bargain hunting and tight budgets are key
                                • Greater fashionability, better stores
                                  • Future opportunities and challenges
                                  • Internal Market Environment

                                    • Key points
                                      • Clothing selling prices plummet in 2009
                                        • Figure 1: Implied price deflator, clothing, garments, percentage change, quarter on corresponding quarter of previous year, Q1 2006-Q2 2009
                                      • Increasing importance of store design
                                        • Ethical concerns of consumers put aside?
                                          • No flight towards quality
                                            • Online retailing takes off
                                              • Figure 2: Transactional websites in value clothing
                                          • Broader Market Environment

                                            • Key points
                                              • Consumer spending takes a hit as households rebuild savings
                                                • The clothing hit
                                                  • Figure 3: Items that adults are cutting back on in the recession, February 2009
                                                • 25-34s set to be the big opportunity
                                                  • Figure 4: Trends in the age structure of the UK population, 2004-14
                                                • Upmarket consumers set to increase
                                                  • Figure 5: Trends in the socio-economic structure of the UK adult population, 2004-14
                                                • Retirees present a major challenge for the sector
                                                  • Figure 6: Trends in the lifestage structure of the UK adult population, 2004-14
                                                • Unemployment set to hit consumer confidence
                                                  • Figure 7: Employment and unemployment, by gender, 2004-14
                                                • Key consumer groups now online
                                                • Competitive Context

                                                  • Key points
                                                    • Value clothing absorbs most clothing growth
                                                      • Figure 8: UK consumer spending on clothing, and value clothing, including VAT, current prices, 2004-09
                                                    • Consumers cut back on ‘fun’ spending categories
                                                      • Figure 9: UK consumer spending on clothing and other complementary and competitive goods and services (£million including VAT, at current prices, 2004-09
                                                  • Strengths and Weaknesses in the Market

                                                    • Strengths
                                                      • Weaknesses
                                                      • Who’s Innovating?

                                                        • How to make the Internet pay its way
                                                          • Making value environments more interesting
                                                            • Ditching celebrities in the downturn
                                                              • Capturing the interest of younger and more upmarket customers
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Value clothing market maintains growth
                                                                    • Figure 10: UK value clothing market, including VAT, 2004-14
                                                                  • Value clothing specialists’ performance recovers
                                                                    • Factors used in the forecast
                                                                    • Retail Competitor Analysis

                                                                      • Key points
                                                                        • Specialist value leaders power ahead
                                                                          • Figure 11: Value clothing retailers’ key data and estimated clothing sales, 2008
                                                                        • Primark performance strongest
                                                                          • Supermarkets fail to match the specialists
                                                                            • Market share
                                                                              • Figure 12: Value clothing retailers’ estimated market shares, 2007-09
                                                                          • Companies and Products

                                                                            • Major specialists
                                                                              • Matalan Ltd
                                                                                  • Figure 13: Matalan’s brands, 2009
                                                                                  • Figure 14: Matalan: Group financial performance, 2004/05-2008/09
                                                                                • Peacock Group
                                                                                    • Figure 15: Peacocks and Bonmarché sub-brands, 2009
                                                                                    • Figure 16: Peacock Group: Financial performance, 2004/05-2008/09
                                                                                  • Primark
                                                                                      • Figure 17: Primark: Brand portfolio
                                                                                      • Figure 18: Primark: Financial performance, 2004-09
                                                                                    • TK Maxx
                                                                                        • Figure 19: TK Maxx: Financial performance, 2004/05-2008/09
                                                                                      • QS Group
                                                                                        • Non-specialists
                                                                                          • George at Asda
                                                                                              • Figure 20: Asda Group financial performance, 2005-07
                                                                                            • Tesco Plc
                                                                                                • Figure 21: Tesco: Brand portfolio
                                                                                                • Figure 22: Tesco UK financial performance, 2005-09*
                                                                                            • Brand Elements

                                                                                                • Key points
                                                                                                  • Brand map
                                                                                                      • Figure 23: Attitudes towards and usage of value clothing brands, September 2009
                                                                                                    • Brand qualities of value clothing brands
                                                                                                      • Supermarkets friendliest, but Sainsbury’s lags behind
                                                                                                        • Figure 24: Personalities of various value clothing brands, September 2009
                                                                                                      • Experience of value clothing brands
                                                                                                        • Tesco and Asda most popular, Matalan set for resurgence?
                                                                                                          • Figure 25: Consumer visitation of various value clothing brands, September 2009
                                                                                                        • Brand intentions for value clothing brands
                                                                                                          • Knowledge lacking for TJ Hughes, Matalan strong on consideration
                                                                                                            • Figure 26: Consideration of various value clothing brands, September 2009
                                                                                                          • Brand satisfaction for value clothing brands
                                                                                                            • George edges ahead for customers
                                                                                                              • Figure 27: Satisfaction with various value clothing brands, September 2009
                                                                                                            • Brand commitment to value clothing brands
                                                                                                              • Primark is top choice
                                                                                                                • Figure 28: Commitment to various value clothing brands, September 2009
                                                                                                              • Tesco
                                                                                                                • What the consumer thinks
                                                                                                                  • Figure 29: Attitudes towards the Tesco brand, September 2009
                                                                                                                • Peacocks
                                                                                                                  • What the consumer thinks
                                                                                                                    • Figure 30: Attitudes towards the Peacocks brand, September 2009
                                                                                                                  • H&M
                                                                                                                    • What the consumer thinks
                                                                                                                      • Figure 31: Attitudes towards the H&M brand, September 2009
                                                                                                                    • George at Asda
                                                                                                                      • What the consumer thinks
                                                                                                                        • Figure 32: Attitudes towards the ASDA/George brand, September 2009
                                                                                                                      • Primark
                                                                                                                        • What the consumer thinks
                                                                                                                          • Figure 33: Attitudes towards the Primark brand, September 2009
                                                                                                                      • Brand Communication and Promotion

                                                                                                                        • Key points
                                                                                                                          • Value cutbacks mirror clothing ad trends
                                                                                                                            • Figure 34: Main monitored media advertising expenditure, by value clothing retailers, 2005-09
                                                                                                                          • Supermarkets the major spenders
                                                                                                                            • Figure 35: Main monitored media advertising expenditure by value clothing retailers, by fascia, 2005-09
                                                                                                                        • The Consumer – Where Value Clothing is Bought

                                                                                                                          • Key points
                                                                                                                              • Figure 36: Percentage of adults shopping for clothing at leading value clothing retailers in the past 12 months, October 2009
                                                                                                                            • Primark takes the lead in value clothing
                                                                                                                              • Supermarkets fall back since 2007
                                                                                                                                  • Figure 37: Percentage of adults shopping for clothing at selected leading value clothing retailers in the past 12 months, October 2009 versus September 2007 and February 2005
                                                                                                                                • Primark gains among the young
                                                                                                                                    • Figure 38: Primark: Market penetration, by age and socio-economic group, 2009 vs. 2007
                                                                                                                                  • George loses women and the middle aged
                                                                                                                                      • Figure 39: George at Asda: Market penetration, by age and socio-economic group, 2009 vs. 2007
                                                                                                                                    • Matalan wins younger audience
                                                                                                                                        • Figure 40: Matalan: Market penetration, by age and socio-economic group, 2009 vs. 2007
                                                                                                                                      • Tesco suffers segmenting problems
                                                                                                                                          • Figure 41: Tesco: Market penetration, by age and socio-economic group, 2009 vs. 2007
                                                                                                                                        • TK Maxx picks up on younger, upmarket audience
                                                                                                                                          • Peacocks misses out on the affluent and men
                                                                                                                                            • Over-45s are attracted to charity shops
                                                                                                                                              • Bonmarché hits the 65+ demographic
                                                                                                                                                • Men most likely not to shop at value clothing retailers
                                                                                                                                                • The Consumer – Attitudes Towards Value Clothing

                                                                                                                                                  • Key points
                                                                                                                                                    • Female bargain hunters are key
                                                                                                                                                      • Figure 42: Attitudes towards buying value clothing, June 2009
                                                                                                                                                    • 35-44s see good value for money
                                                                                                                                                      • Women more likely to buy on a budget
                                                                                                                                                        • Quality not trusted
                                                                                                                                                          • One in seven skimps on clothing spending; under-25s shop on price
                                                                                                                                                            • Fast fashion a draw for women, not men
                                                                                                                                                              • Under-25s buy because of wide choice
                                                                                                                                                                • Upmarket ABs most concerned about cheap labour and quality
                                                                                                                                                                  • Youngest consumers the keenest
                                                                                                                                                                    • Few enjoy the value shopping experience
                                                                                                                                                                      • Statements on attitudes by where they shop
                                                                                                                                                                      • Target Groups

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Figure 43: Target groups for value clothing retailers according to attitudes towards buying value clothing, October 20009
                                                                                                                                                                        • Group 1: Tight Budgeters (15%)
                                                                                                                                                                          • Group 2: Quality Concerned (60%)
                                                                                                                                                                            • Group 3: Value Hunters (26%)
                                                                                                                                                                            • Appendix – Broader Market Environment

                                                                                                                                                                                • Figure 44: GDP quarterly percentage change, 2004-09
                                                                                                                                                                                • Figure 45: GDP, PDI, consumer expenditure and savings, at current prices, 2004-14
                                                                                                                                                                                • Figure 46: GDP, PDI, consumer expenditure and savings, at constant 2004 prices, 2004-14
                                                                                                                                                                                • Figure 47: British internet penetration at home/work/place of study or elsewhere, by demographics, 2002-09
                                                                                                                                                                            • Appendix – Where Value Clothing is Bought

                                                                                                                                                                                • Figure 48: Most popular retailers bought value clothing from in the last 12 months, by demographics, October 2009
                                                                                                                                                                                • Figure 49: Next most popular retailers bought value clothing from in the last 12 months, by demographics, October 2009 (continued)
                                                                                                                                                                                • Figure 50: Other retailers bought value clothing from in the last 12 months by demographics, October 2009 (continued)
                                                                                                                                                                            • Appendix – The Consumer – Attitudes Towards Value Clothing

                                                                                                                                                                                • Figure 51: Most popular statements on buying value clothing, by demographics, October 2009
                                                                                                                                                                                • Figure 52: Next most popular statements on buying value clothing, by demographics, October 2009 (continued)
                                                                                                                                                                                • Figure 53: Most popular statements on buying value clothing by demographics, October 2009 (Continued)
                                                                                                                                                                                • Figure 54: Most popular retailers bought value clothing from in the last 12 months, by statements on buying value clothing, October 2009
                                                                                                                                                                                • Figure 55: Next most popular retailers bought value clothing from in the last 12 months by Statements on buying value clothing, October 2009 (Continued)
                                                                                                                                                                                • Figure 56: Other retailers bought value clothing from in the last 12 months, by statements on buying value clothing, October 2009 (continued)
                                                                                                                                                                                • Figure 57: Most popular statements on buying value clothing, by retailers bought value clothing from in the last 12 months, October 2009
                                                                                                                                                                                • Figure 58: Next most popular statements on buying value clothing, by retailers bought value clothing from in the last 12 months, October 2009 (continued)
                                                                                                                                                                                • Figure 59: Other statements on buying value clothing, by retailers bought value clothing from in the last 12 months, October 2009 (continued)
                                                                                                                                                                                • Figure 60: Statements on buying value clothing, by target groups, October 2009
                                                                                                                                                                            • Appendix – Target Groups

                                                                                                                                                                                • Figure 61: Target groups, by demographics, October 2009
                                                                                                                                                                                • Figure 62: Retailers bought value clothing from in the last 12 months, by target groups, October 2009

                                                                                                                                                                            Companies Covered

                                                                                                                                                                            • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                            • Asda Group Ltd
                                                                                                                                                                            • Associated British Foods Plc
                                                                                                                                                                            • Bonmarché
                                                                                                                                                                            • Chupa Chups S.A.
                                                                                                                                                                            • Co-operative Group
                                                                                                                                                                            • Debenhams Total (GTV)
                                                                                                                                                                            • Duchy Originals
                                                                                                                                                                            • Ethel Austin Ltd
                                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                                            • H&M Hennes & Mauritz
                                                                                                                                                                            • J. Sainsbury
                                                                                                                                                                            • Laura Ashley Group
                                                                                                                                                                            • Lidl (UK)
                                                                                                                                                                            • Marks & Spencer
                                                                                                                                                                            • Matalan Ltd
                                                                                                                                                                            • New Look Group Plc
                                                                                                                                                                            • Next Group
                                                                                                                                                                            • Peacocks
                                                                                                                                                                            • Primark Stores Ltd
                                                                                                                                                                            • Tesco Plc
                                                                                                                                                                            • The TJX Companies
                                                                                                                                                                            • TJ Hughes Plc
                                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                                            • WH Smith PLC
                                                                                                                                                                            • Wm Morrison Supermarkets

                                                                                                                                                                            Value Clothing Retailing - UK - December 2009

                                                                                                                                                                            £1,995.00 (Excl.Tax)