UK Retail Market and Financial Comparison of GAP and NEXT Case Study

UK Retail Market and Financial Comparison of GAP and NEXT - Case Study ExampleThis paper illustrates that the top five clothing retailers, M&S, Next, Arcadia convocation, Matalan, and BHS, claimed 44% of sector sales in 2004 making the UK one of the most concentrated clothing sectors in Europe. In spite of this, value-led retailers, such as TK Maxx, ASDA (George range) and Tesco outperformed the counterweight of the grocery store, continuing to be the fastest growing channel and generating 2 billion in clothing sales. Next retail also continued to grow, overtaking the Arcadia Group and moving into second place behind M&S. The value clothing market has become increasingly competitive. Not only have many of the retailers in this sector really got their act together in terms of upgrading store environments and enhancing their yield offers - becoming, in effect, the new lower middle market, but the middle market has been fighting back. The last 18 months have seen a strong reco very( prenominal) at M&S, and BHS - that describes itself as premium value- is also a much stronger player. Therefore, in that respect is more and better choice for consumers. However, while 2001 and 2002 were buoyant years for retail and for clothing, 2003 is seeing a significant slowdown. It is much quantifiably harder to persuade consumers to spend. A key actor is that value clothing retailers now know that they cannot succeed with low prices alone. Consumers expect a pleasant environment and mainstream-quality merchandise even if they are paying very little. So they have had to make very significant investments in their store estates - at a time when many are expanding rapidly too. Also, this space and product expansion has been very challenging. Many have found that their infrastructure, systems, IT and logistics have just not been up to it and this has affected their sales performance. In 2004, the competitive environment in the UK retail market has experienced a dramatic re-shape . This re-shape has been led by the acquisition of the Safeway supermarket chain by Morrisons, which has created the countrys fourth-biggest retailer and has given Morrisons the chance to pose a real threat to Sainsburys, in the fight for third place behind the UKs biggest retailers, Tesco and Asda. According to new research analyzing the Retailing industry in the UK by Euromonitor International, the front towards greater consolidation continue to impact the UK retail industry over the next five years. Euromonitor suggests that future mergers and acquisitions in UK food retailing are credibly both to be on a smaller scale and to involve the take-over of convenience retailers by hypermarket chains wishing to strengthen their presence in the UKs game streets. According to Raphael Moreau, Retailing Analyst Diversifying into convenience stores is on the agenda for the UKs top hypermarket chains because this retail format offers good growth prospects. Convenience stores have change m agnitude their share of the UK food retailing market from 20% to 21.9% between 1999 and 2003. Clearly, these stores are appealing to UK consumers, thanks to their convenient locations and extended opening hours. Hypermarket retailers want to make certain they dont miss out on this growing area of the UK market. High Street convenience stores are also particularly attractive to hypermarket retailers, due to strict intend rules restricting the opening of new out-of-town hypermarkets. Euromonitor International believes that this trend is likely to intensify in the next five years.