A new look: Department stores are using new strategies to try to return to profitability

Operators in the Department Stores industry have struggled over the past five years due to a weak retail environment and largely negative consumer sentiment, which followed instability in global financial markets. Consumers have become increasingly price conscious and reluctant to spend their discretionary income, instead preferring to pay down debt and boost their savings. Industry revenue is expected to fall at an annualised 0.9% over the five years through 2017-18, to $18.3 billion. Uncertain economic conditions and a decrease in household discretionary income in 2017-18 are expected to contribute to a projected 2.7% decline in current year industry revenue...read more.

Industry Statistics & Market Size
Revenue
$18bn
Annual Growth 13-18
-0.9%
Forecast Growth 18-23
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Profit
x.x%lock
Employment
87,955
Businesses
114
Market Share of Companies

Industry Threats & Opportunities

  • Discounting has become prevalent across many stores and product lines
  • Largely negative consumer sentiment and subdued discretionary spending over the past five years have resulted in excess stock
  • Increased industry consolidation is expected due to rising competitive pressures

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    Industry Report - Industry SWOT Analysis Chapter

    The Department Stores industry is in the mature stage of its life cycle. Over the 10 years through 2022-23, the industry's contribution to the economy (industry value added) is expected to rise by an annualised 0.1%, a weak performance when compared with annualised GDP growth of 2.6%. This indicates that the industry is growing at a slower pace than the overall economy.The maturity of the industry has been evident in the merger and acquisition activity of its major players over the past two decades. In mid-2006, Coles Myer sold Myer to a private consortium for $1.4 billion and in November 2007, Wesfarmers acquired Coles Group, which included Kmart and Target. In ...purchase to read more.

    Additional Insights for the Department Stores Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Department Stores Industry are

  • Ability to control stock on hand
  • Superior financial management and debt management
  • Having a clear market position

    • IBISWorld analysts also discuss how external factors such as Demand from online shopping and Real household discretionary income in the Department Stores industry impact industry performance..

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    What's in this report

    Industry Products

    What is the Department Stores Industry?

    Department stores retail fabrics, soft goods, clothing, chinaware, glassware, housewares, perfumes, cosmetics, toiletries, furniture and household appliances. Goods are normally sold through separate instore departments. Department stores purchase products from wholesalers and manufacturers and onsell them to consumers, generally without changing the products. They also undertake activities like customer service, product merchandising, advertising, inventory control and cash handling.

    Industry Products
  • Clothing, footwear and accessories
  • Household appliances and consumer electronics
  • Furniture, housewares and textile goods
  • Cosmetics and toiletries
  • Toys and games
  • Books, magazines and other printed material
  • Other products
    • Industry Activities
  • Department store operation
  • Clothing, footwear and accessories retailing
  • Furniture retailing
  • Kitchenware, china, glassware and other housewares retailing
  • Textile goods retailing
  • Electrical, electronic and gas appliances retailing
  • Perfumes, cosmetics and toiletries retailing
    • Table of Contents

    About this Industry

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources

    Industry at a Glance

    Industry Statistics Snapshot
    Industry Structure
    Executive Summary

    Industry Performance

    Executive Summary
    Key External Drivers
  • Demand from online shopping
  • Real household discretionary income
  • Consumer sentiment index
  • Demand from clothing, footwear and personal accessory retailing
  • Demand from electrical and electronic goods retailing
  • Demand from furniture, floor coverings, houseware and textile goods retailing

    • Current Performance
  • Profit and wages
  • Competition
  • Exclusive labels
  • Chart: Revenue Growth

    • Industry Outlook
  • Industry participation
  • Profit and wages
  • Growing competition
  • Table: Department Stores Industry Revenue Outlook

    • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Department Stores Industry Lifecycle vs The Economy

    • Products & Markets

    Supply Chains
    Key Buying Industries
  • Consumers

    • Key Selling Industries
  • Clothing Wholesaling
  • Cosmetics and Toiletry Wholesaling
  • Furniture and Floor Covering Wholesaling
  • Household Appliance Manufacturing
  • Household Appliance Wholesaling
  • Men's and Boys' Wear Manufacturing
  • Sleepwear, Underwear and Infant Clothing Manufacturing
  • Wicker and Fibreglass Furniture Manufacturing
  • Women's and Girls' Wear Manufacturing

    • Products & Services
  • Clothing, footwear and accessories
  • Furniture, housewares and textile goods
  • Household appliances and consumer electronics
  • Cosmetics and toiletries
  • Toys and games
  • Books, magazines and other printed material
  • Other products
  • Chart: Department Stores Industry Products and Services Segmentation

    • Demand Determinants
    Major Markets
  • People aged 35 to 54
  • People aged 15 to 34
  • People aged 55 and over
  • Chart: Major Market Segmentation for the Department Stores Industry

    • International Trade
    Business Locations
    Chart: Business Locations by State

    Competitive Landscape

    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Department Stores

    • Basis of Competition
  • Internal
  • External

    • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Department Stores Industry

    • Industry Globalization

    Major Companies

    Wesfarmers Limited, Woolworths Group Limited, Myer Holdings Limited, Osiris Holdings Pty Ltd,
  • Table: Wesfarmers Limited - financial performance
  • Table: Woolworths Group Limited - financial performance
  • Table: Myer Holdings Limited - financial performance
  • Table: Osiris Holdings Pty Ltd - financial performance

    • Operating Conditions

    Capital Intensity
  • Chart: Level of Capital Intensity for the Department Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

    • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

    • Regulation & Policy
    Industry Assistance

    Key Statistics

    Table: Industry Data for the Department Stores Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

    • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data

    Jargon & Glossary

    Ecommerce
  • The sale and purchase of goods transacted via the internet.
    • Radio Frequency Identification (Rfid)
  • This system tracks products through the supply chain by releasing signals from a chip that is inserted in the product at the manufacturing stage.
    • Wholesale Bypass
  • When buyers bypass or skip wholesalers to buy directly from manufacturers and thereby cut costs.
    • What Our Customers Say
    Why buy this report?

    IBISWorld’s Department Stores market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Department Stores:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Department Stores market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Department Stores, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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