All over the shop: Intensifying external online competition has constrained industry revenue

Operators in the Department Stores industry have struggled over the past five years due to a weak retail environment and largely negative consumer sentiment. 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 0.2% over the five years through 2018-19, to $18.8 billion. Uncertain economic conditions and intensifying external online competition are expected to contribute to a 0.5% decline in industry revenue over the current year.The Department Stores industry is highly concentrated, with the top four players expected to account for almost 95% of industry revenue in more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Discounting has become prevalent across many stores and product lines over the past five years
  • Weak consumer sentiment and subdued discretionary spending have resulted in excess stock
  • Increased industry consolidation is anticipated due to rising competitive pressures
  • Industry Report - Industry Analysis Chapter

    Operators in the Department Stores industry have struggled over the past five years on the back of a subdued retail environment, largely negative consumer sentiment and intensifying industry competition. Widespread economic uncertainty has caused consumer sentiment to be largely negative over the period, constraining demand for the industry’s products. Households have scaled back discretionary spending, with price-conscious consumers focusing on paying down debt and increasing their savings instead. Over this period, bargain hunting has become more prevalent and consumers have come to expect goods at sale prices year-round. Dep...purchase to read more.

    Additional Insights for the Department Stores Industry

    IBISWorld has determined the most important Key Success Factors for the Department Stores 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

    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

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    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

  • 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
  • Other products
  • Toys and games
  • Books, magazines and other printed material
  • 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
    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
    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

  • 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
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • 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 can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    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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