Research finds department store decline

Department stores in the UK and Ireland are facing an uncertain future due to increased competition from discounters, hypermarkets and on-line stores, but could save themselves by increased differentiation, says a new report.

The report, Department Stores in Europe by Retail Intelligence, suggests that design may play a key role enabling stores to reclaim market share.

The research group suggests that department stores are going to benefit from: “the concept of retail theatre, the exclusivity of brands and high levels of décor and service”.

According to the report, department store sales throughout Europe are in steady and continued decline.

In the largest single market, Germany, the proportion of all retail sales made in department stores fell from 4.73 per cent in 1995 to 4.36 per cent in 1998. In total, approximately 2.8 per cent of European retail sales are from department stores.

UK department store groups, which currently include a large proportion of independent operators, are expected to go through a period of consolidation, to fall in line with players in mainland Europe.