Price increases and a shift in consumer buying habits will lead to the premium sector overtaking the value sector as the key battleground for market share, according to a new report by retail research firm Verdict Research.
The premium womenswear sector (classed as luxury brands and top-end high street stores that, for example, sell blazers at more than £100) is set to grow 17% to £5.5bn over the next five years, outstripping the overall womenswear market, which is expected to grow 12.6%.
In 2009, premium womenswear sales were worth £4.7bn against a total womenswear market value of £19.2bn. Verdict said continued inflation and rising costs were not a passing trend and could play into the hands of the premium, luxury and independent sectors as shoppers lean towards buying fewer, more expensive items and demanding exceptional customer service.
However, the market research firm warned that it would not be plain sailing for premium level retailers because middle-market high street chains such as Marks & Spencer were likely to start introducing more premium sub-brands and upping design detail in their products to try to justify price rises and capitalise on the consumer trend for buying better quality items.
Limited edition collections as seen at New Look and designer collaborations such as those at H&M are also set to gain more prominence at the value end of the market, as these retailers attempt to muscle in on higher spending territory.
Verdict lead analyst Maureen Hinton said: “Entry-level price points will creep up but [price] increases will mainly come through expansion at the top end. Branding will become more important to explain that and we’ll see more retailers launch premium sub-brands.”
Growth at the premium end of the market would also be driven by an ageing population, said Verdict, as older customers tended to place more emphasis on quality over price.
Hinton said: “Brands have acknowledged the spending power of older women with more grown-up collections, such as those seen at Giles Deacon and Burberry Prorsum. Retailers like John Lewis are doing the same with a high-fashion offer that can be worn by older women. Consumers are buying fewer items but expect for more for their money.”