2022
9
UK The Changing Face of the High Street Market Report 2022
2022-07-08T04:02:45+01:00
OX1103029
2195
152777
[{"name":"Retail","url":"https:\/\/store.mintel.com\/industries\/retail"}]
Report
en_GB
“The cost of living crisis is likely to place a significant damper on what should have been a welcome return of stronger footfall to the UK’s high streets. In-store sales…

UK The Changing Face of the High Street Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK The Changing Face of the High Street Market Report identifies consumers’ attitudes towards the high street retail market, the expansion of online shopping, and the impact of the cost of living on the UK high street. This report covers the retail market size, market forecast, market segmentation and industry trends in the UK high street retail market.

 

Current Landscape of High Street Retail Market

As we emerge from the peak of the pandemic, the high street retail market finds itself in unfamiliar territory, caught between greater awareness of its importance and role in connecting consumers while trying to change convenience perceptions, which have naturally been heightened after two years of greater online use.

Mintel’s high street retail market report identifies how the cost of living crisis will naturally constrain retail demand and place value high on the consumers’ agenda, with increased trading down across ranges. Discretionary non-food demand will be particularly hard hit, with big-ticket categories expected to drop in demand.

 

UK High Street Retail Market Share and Key Industry Trends

The biggest threat to the high street retail market is that stores may not see consumers return in the numbers we may have expected since restrictions have been lifted. Most non-food sales have returned to stores, but the accelerating online sales have hit the UK high street retail market share. This will further strain retailers who cannot, or do not, compete in the online space and could lead to further gaps on UK high streets.

  • 65% of UK shoppers agree that shopping online is more convenient than in-store.
  • 60% of UK consumers agree that visiting a shopping destination is a good way to socialise with friends/family.
  • 79% of UK consumers believe shopping areas are an important to the local community.
  • 54% of UK shoppers believe that the best prices are found online.

 

Future Trends in the UK High Street Retail Market

However, Mintel’s high street retail market data suggests that there are significant opportunities for physical stores. The pandemic has underlined the importance of local communities and shopping areas, and greater demand for leisure and foodservice will bring more footfall back to shopping destinations.

Although the continual shift towards online sales and a more integrated multi-channel market will continue, an opportunity exists for physical retail to lead on growing conscious consumerism, particularly if it can tie value-led services like second-hand, repairs and rental to the dual value and environmental drivers.

To discover more about the UK High Street Retail Market, read our UK Retail Rankings Market Report 2022 or take a look at our other Retail Market Research.

 

Quickly Understand

  • The impact of the cost-of-living crisis on high street retail market and in-store trade.
  • Explores retail industry market research, retail market size and UK high street retail market share.
  • The return to the high street and the inflated role of online moving forward.
  • Frequency of and reason for visiting shopping locations within the last six months.
  • The role of service in-store and areas of improvement consumers want to see.
  • Consumer attitudes to the role of shopping locations in the community, convenience, price and ethics of shopping in-store.

 

Covered in this Report

Brands:  Boots, Tesco, Revolute, Klarna, L’Oreal, Schnuck Markets, Spoon Guru, Olio, Motatos, Matsmart, Pinduoduo, M&S, ASOS, Crew, Fatface, Thrift+, Dotte, eBay, Apple, Currys, Back Market, Co-op, Morrisons, Selfridges, HURR, The Little Loop, John Lewis, Toy Box Club, Whirli, Walmart, Amazon Prime, Getir, Gorillas, Gophr, Nike, H&M, Browns, Savage X Fenty, Anya Hindmarch, Harrods, Fortnum and Mason, Primark, Lego, Sainsbury’s, Gymshark, JD, Uniqio, IKEA, Trustpilot, Google, Levi, Zara, PayPal, Misguided, McColl’s, Arcadia, Debenhams, Boohoo.

Expert Analysis from a Specialist in the Field

This report, written by Nick Carroll, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends in the high street retail market and add expert context to the numbers.

“The cost of living crisis is likely to place a significant damper on what should have been a welcome return of stronger footfall to the UK’s high streets. In-store sales are expected to regain more ground in 2022 but the positive price and convenience perception of online is likely to temper how much ground is regained. However, greater desire for entertainment, leisure and foodservice experiences in shopping locations will help to drive footfall as consumers look to reengage with those activities.”

Nick Carroll - Research Analyst

Nick Carroll
Category Director – Retail Insights

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
  2. Executive Summary

    • The five-year outlook for retail
      • Figure 1: Retail outlook, 2022-27
    • The market
    • Value sales to continue to grow, driven by inflation in the short term
      • Figure 2: Market forecast for all retail sales, 2017-27
    • Non-store expected to fall back to account for 27% of the market before growing again
      • Figure 3: Estimated and forecast share of total retail sales, in-store sales and non-store sales, 2017-27
    • The retail sector can look ahead to a post-peak pandemic landscape
      • Figure 4: COVID-19 Tracker – Concern levels regarding COVID-19 and shopping behaviour change as a result of the pandemic, 2020-22
    • Inflation is the key concern for 2022 for consumers, brands and the economy
      • Figure 5: CPIH, overall index and core categories, 2021-22
    • Rising inflation creating significant concern around core areas
      • Figure 6: Consumer concerns about household finances, 2021-22
    • Consumers’ financial wellbeing has slipped from its recent high point
      • Figure 7: Household financial wellbeing index, 2016-22
    • The consumer
    • 93% have visited a shopping location in the last six months
      • Figure 8: Shopping locations visited and where the most was spent in the last six months, 2022
    • Over a third of high street visitors visit weekly
      • Figure 9: Frequency of shopping location visitation, 2022
    • Younger shoppers more likely to visit ‘destination’ retail locations
      • Figure 10: Shopping locations visited in the last six months, by age and household income, 2022
    • Proximity and ease of access key factors for shopping location choice
      • Figure 11: Reasons for visiting a shopping location most frequently in the last six months, 2022
    • Service can be a driver of footfall if invested in
      • Figure 12: In-store features consumers would like to see more of in-store, 2022
    • Stores face a convenience challenge
    • Socialising must be used as a driver
    • Ethical drivers must be a boost to physical stores
    • Stores have to close the price-perception gap
      • Figure 13: Attitudes to shopping, 2022
  3. Issues and Insights

    • The impact of the income squeeze on retail and the high street…
    • …and how the high street can lessen the impact
  4. Market Drivers

    • The conflict in Ukraine will hurt the UK economy
    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID-19 bounceback will be followed by a period of slower growth
    • Employment has held up better than expected
    • Inflation is the key concern for 2022 for consumers, brands and the economy
      • Figure 14: CPIH, overall index and core categories, 2021-22
    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 15: Household financial wellbeing index, 2016-22
    • …and concerns over inflation are coming to the fore
      • Figure 16: Consumer concerns about household finances, 2021-22
    • Ageing population means older shoppers cannot be forgotten in evolution of in-store shopping
      • Figure 17: Trends in the age structure of the UK population, 2016-26
  5. The Return to the High Street Post-Pandemic

    • The retail sector can look ahead to a post-peak pandemic landscape
      • Figure 18: COVID-19 Tracker: concern levels regarding COVID-19 and shopping behaviour change as a result of the pandemic, 2020-22
    • Online sales continue to fall…
      • Figure 19: Online sales growth by major category, 2021-22
      • Figure 20: Share of online sales, by type of retail operation, 2018-22
      • Figure 21: Online share of retail sales, by major category, 2021-22
    • …with stores reclaiming a majority of non-food sales
      • Figure 22: Estimated share of total non-food sales, store versus online and other non-store, 2020-22
  6. The Impact of Inflation and the Income Squeeze on Retail Spending

    • The income squeeze will dictate much of consumer behaviour in the short term
    • Retail has benefitted from access to shoppers during the pandemic
      • Figure 23: Breakdown of total consumer spending (value), by major category, 2006-21
      • Figure 24: Breakdown of total consumer spending (volume), by major category, 2006-21
    • Big-ticket naturally squeezed as incomes come under pressure
      • Figure 25: Retail goods, major categories as a % of total (volume) spending, 2006-15
    • Spending may hold up but it may be too much for some retailers
      • Figure 26: Retail business failures, 2007-21
  7. Market Size and Performance

    • Retail sales remain positive despite the impact of the pandemic…
      • Figure 27: Total retail sales, market size and growth, 2016-21
    • … but stores have been hit hard since the onset of the pandemic
      • Figure 28: Total estimated in-store sales, market size and growth, 2016-21
      • Figure 29: Total non-store retail sales, 2016-21
    • Record high shares of sales for non-store in 2020 and 2021
      • Figure 30: Share of sales by stores and non-store, 2009-21
  8. Market Forecast

    • Cost of living crisis will put pressure on retail demand
      • Figure 31: Category outlook, 2022-27
    • Value sales to continue to grow, driven by inflation in the short term
      • Figure 32: Market forecast for all retail sales, 2017-27
    • In-store sales to recover as the market finds its new equilibrium
      • Figure 33: Market forecast for in-store retail sales, 2017-27
      • Figure 34: Market forecast for total non-store sales, 2017-27
    • Non-store expected to fall back to account for 27% of the market before growing again
      • Figure 35: Estimated and forecast share of total retail sales, in-store sales and non-store sales, 2017-27
    • Market drivers and assumptions
      • Figure 36: Key drivers affecting Mintel’s market forecast, 2016-26
    • Forecast methodology
  9. Mintel Trend Drivers

    • Identifying formats which will tap into the drivers of behaviour across the next decade
      • Figure 37: Mintel Trend Drivers, globalised drivers, 2022
  10. Trend Driver – Value

    • Mintel Trend Driver: Value
      • Figure 38: Trend driver and pillars: Value, 2022
    • Spreading the cost
      • Figure 39: Klarna card, 2022
      • Figure 40: Revolut Rewards, 2022
    • Simplifying the value proposition
      • Figure 41: Boots EDLP signage, 2022
    • Adding value in other ways
      • Figure 42: Throw No More, Norway, 2021
    • New models to tap into value
      • Figure 43: Motatos launch announcement, 2022
      • Figure 44: Paddy field farmers on Pinduoduo, 2020
    • Engage consumers in the move to a circular economy
      • Figure 45: M&S and Dotte Kidswear Partnership, 2022
      • Figure 46: Back market, London Underground Advertisement, 2022
      • Figure 47: Spring recycling station in Co-op, 2022
    • Rental and repairs get a refresh
      • Figure 48: CU in-store rentals, South Korean, 2022
    • Increasing speed of delivery, brings stores back into the conversation
      • Figure 49: Walmart InHome delivery, 2022
    • What it means:
  11. Trend Driver – Experiences

    • Mintel Trend Driver: Experiences
      • Figure 50: Trend driver and pillars: Experiences, 2022
    • Omnichannel shopping post-COVID accelerates role of technology in stores
      • Figure 51: Nike’s Inside Track feature at its Rise concept store in Seoul, 2021
      • Figure 52: Amazon Style, Find your Style, 2022
    • Appeal for more fitting tools in store
      • Figure 53: H&M full-body scanner, 2021
      • Figure 54: Brown’s interactive mirror at Mayfair, 2021
    • Adding services in-store adds value too
      • Figure 55: The Village by Anya Hindmarch, 2022
    • Tap into shoppers’ sense of nostalgia and playfulness
      • Figure 56: Lego’s Personalisation Studio at its New York City flagship, 2021
    • What this means
  12. Trend Driver – Wellbeing

    • Mintel Trend Driver: Wellbeing
      • Figure 57: Trend driver and pillars: Wellbeing, 2022
    • Grocers lend a helping hand…
      • Figure 58: Vitl, London Underground advertisement, 2022
    • …while non-food players also look to tap into the wellness trend
    • Catering to an ageing population
      • Figure 41: CVS senior targeted equipment, 2022
    • Stores make room for wellness experiences
    • What this means
  13. Trend Driver – Surroundings

    • Mintel Trend Driver: Surroundings
      • Figure 60: Trend driver and pillars: Surroundings, 2022
    • Make repair services as much a part of the fashion experience as buying
      • Figure 61: Uniqlo and Theory joint venture store, 2022
      • Figure 62: Primark free repair classes, 2021
    • Empower consumers to make informed sustainable decisions
      • Figure 63: Tesco ‘Better Baskets’, 2022
    • Give a shout-out to smaller players and local produce
    • What this means
  14. Shopping Location Visitation

    • 93% have visited a shopping location in the last six months
    • Town centres/high streets claim the highest share of spend
      • Figure 64: Shopping locations visited and where the most was spent in the last six months, 2022
    • Younger shoppers more likely to visit ‘destination’ retail locations
      • Figure 65: Shopping locations visited in the last six months, by age and household income, 2022
    • A quarter of shoppers have visited more than five locations in the past six months
      • Figure 66: Repertoire of shopping locations visited in the past six months, 2022
  15. Frequency of Shopping Location Visitation

    • Over a third of high street visitors visit weekly
      • Figure 67: Frequency of shopping location visitation, 2022
    • Reopening of society will give a boost to all shopping locations
      • Figure 68: At least once a month visitation to select shopping locations, by current location of work, 2022
    • Access critical to frequency of visit
      • Figure 69: Impact of transport infrastructure at shopping locations, 2022
  16. Reasons to Visit Physical Shopping Locations

    • Proximity and ease of access key factors for shopping location choice
      • Figure 70: Reasons for visiting a shopping location most frequently in the last six months, 2022
      • Figure 71: Reasons for visiting a shopping location most frequently in the last six months, by shopping location visited at least monthly in the past six months, 2022
    • Proximity key for older shoppers, but mix of non-retail important for younger shoppers
      • Figure 72: Reasons for visiting a shopping location most frequently in the last six months, by age, 2022
    • Variety of physical stores important to those who shop online most frequently
      • Figure 73: Reasons for visiting a shopping location most frequently in the last six months, by frequency of online shopping, 2022
      • Figure 74: Agreement to statements regarding quality of stores and food and drink options in shopping locations, 2022
  17. Service Drivers in Physical Shopping

    • Service can be a driver of footfall if invested in
    • Need for stores to recognise physical patronage is no longer a given
      • Figure 75: In-store features consumers would like to see more of in-store, 2022
    • Convenience critical in service to drive greater footfall for younger shoppers
      • Figure 76: In-store features consumers would like to see more of in-store, by age, 2022
    • Value in physical browsing must be encouraged
      • Figure 77: Attitudes to browsing and service in-store, by age, 2022
  18. Attitudes to Convenience, Price and the Ethics of Shopping In-store

    • Stores face a convenience challenge
      • Figure 78: Attitudes to convenience and in-store/online shopping, by age, 2022
    • Ethical drivers must be a boost to physical stores
      • Figure 79: Attitudes towards physical stores and the community, the environment and socialising, by area lived in, 2022
    • Stores have to close the price-perception gap
      • Figure 80: Attitudes towards price and online shopping, by self-described state of current finances, 2022
  19. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • VAT
    • Abbreviations
    • Mintel Trend Driver methodology
    • Consumer research methodology
  20. Appendix – Forecast Methodology

    • Market forecast and prediction intervals: All Retail Sales
      • Figure 81: All retail sales, market size and forecast, at current and constant prices, 2017-27
      • Figure 82: All retail sales, current price prediction intervals, 2022-27
    • Market forecast and prediction intervals: All In-store Retail Sales
      • Figure 83: All in-store retail sales, market size and forecast, at current and constant prices, 2017-27
      • Figure 84: All in-store retail sales, current price prediction intervals, 2022-27
    • Market forecast and prediction intervals: All Non-store retail sales
      • Figure 85: All non-store retail sales, market size and forecast, at current and constant prices, 2017-27
      • Figure 86: All Non-store retail sales, current price prediction intervals, 2022-27
    • Market drivers and assumptions
    • Forecast methodology

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