Shopping around: Profit margins are being squeezed as customers hunt for bargains

The Department Stores industry has exhibited steady growth over the past five years. Trading conditions across the industry have been supported by positive consumer sentiment and increasing real household discretionary income. However, growing competition among department stores, external players and the online market has reduced industry profitability. The entry of specialist international retailers such as H&M and Zara has further heightened competition in the market. Industry revenue is expected to post annualised growth of 3.4% over the five years through 2017-18, to reach $5.0 billion.Over the past five years, ongoing declines in the cash rate have reduced debt repayments and provided consumers with more money to spend on discretionary purchases...read more.

Industry Statistics & Market Size
Revenue
$5bn
Annual Growth 13-18
3.4%
Forecast Growth 18-23
Profit
Employment
22,304
Businesses
328

Industry Report - Industry Key Buyers Chapter

The Department Stores industry is characterised by a moderate level of market share concentration with the top four players accounting for less than 70.0% of revenue. The major players, The Warehouse, Farmers, and Kmart, have many retail outlets across New Zealand, accounting for almost 170 establishments combined. Consequently, these firms have significant influence over the market and are able to use economies of scale to maximise sales and profitability. The industry also comprises smaller, independent operators with only one or two stores, such as Smith & Caughey's and Blackwell's.While barriers to entry into the industry are moderate, it can be difficult to secure retail space that is large enough to suit a department store, deterring potential entrants. Thi...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 Real household discretionary income and Consumer sentiment index in the Department Stores industry impact industry performance..

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    What's in this report

    What is the Department Stores in New Zealand Industry?

    Department stores retail clothing, furniture, kitchenware, glassware, houseware, household appliances, soft goods, fabrics, perfumes, cosmetics and toiletries. These products are generally displayed and sold via separate instore departments. Merchandise is sourced from wholesalers and manufacturers and then sold to consumers via bricks-and-mortar stores or online sites operated by industry players. Purely online players are excluded from the industry.

    Industry Products
  • Clothing, footwear and personal accessories
  • Furniture, housewares and textile goods
  • Household appliances and consumer electronics
  • Perfumes, cosmetics and toiletries
  • Other products
  • Industry Activities
  • Department store operation
  • Clothing, footwear and accessories retailing
  • Furniture retailing
  • Kitchenware, glassware, houseware and household appliances retailing
  • Soft goods and fabric retailing
  • Perfumes, cosmetics and toiletries retailing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household discretionary income
  • Consumer sentiment index
  • Demand from online shopping
  • 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
  • Trading landscape
  • Competition and profit
  • Industry structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Trading landscape
  • Competition and profit
  • Industry structure
  • Table: Department Stores Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Consumers in New Zealand

  • Key Selling Industries
  • Clothing and Footwear Wholesaling in New Zealand
  • Furniture and Floor Covering Wholesaling in New Zealand
  • Household Appliance Wholesaling in New Zealand
  • Pharmaceutical and Toiletry Goods Wholesaling in New Zealand
  • Textile Product Wholesaling in New Zealand

  • Products & Services
  • Clothing, footwear and personal accessories
  • Furniture, housewares and textile goods
  • Other products
  • Household appliances and consumer electronics
  • Perfumes, cosmetics and toiletries
  • Chart: Department Stores Industry Products and Services Segmentation

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

  • International Trade
    Business Locations
    Chart: Business Locations by State
    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
    The Warehouse Group Limited, Farmers' Trading Company Limited, Coles Group New Zealand Holdings Limited,
  • Table: The Warehouse Group Limited - financial performance
  • Table: Farmers' Trading Company Limited - financial performance
  • Table: Coles Group New Zealand Holdings Limited - financial performance

  • 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
    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
    Ecommerce
  • The sale and purchase of goods transacted via the internet.
  • Point Of Sale (Pos)
  • Technology that incorporates a cash register with a credit and debit card electronic payment system in the one device.
  • 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.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Department Stores in New Zealand 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 in New Zealand:
    • 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 in New Zealand 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 in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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