Footwear retailers suffer despite UK’s growing love of shoes
Cost inflation has compounded the problems facing the UK’s footwear specialists, according to the latest report from Verdict Research.
Of the UK’s Top 10 footwear specialists, eight either saw profit margins fall or made a loss during 2006, and in 2007 this trend will have continued for most specialists. One of the biggest problems plaguing footwear specialists is cost inflation, not least from the EU anti-dumping tariffs, which exacerbated more general retail issues of higher rents, fuel costs and energy prices. According to Verdict Research, footwear specialists accounted for over half of all UK footwear sales in 2001 a figure that has fallen to an estimated 41.8% of footwear sales in 2007 as consumers increasingly turn to clothing retailers, supermarkets and sporting goods retailers to pick up their footwear. “Specialists have fought against the growing competition by opening new stores to fuel sales growth but, with sector profitability sliding, this is compounding their problems,” says Verdict Research retail analyst Carol Ratcliffe. “Footwear retailers need to focus on improving sales densities in their existing stores before adding new outlets. While many have already invested in developing new store formats, they need to accelerate these efforts to catch up with the rising standards set by clothing specialists.”
