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The under-5s market experienced growth of 30 percent
between 1991 and 1996 to achieve a market value of £2.4bn. This was ahead
of the rise in consumer expenditure as a whole during this period, thus leading
to a rise in product penetration in this sector. Many of the products supplied
in the market are essentials for parents, although many are willing to indulge
their children with more sophisticated items.
The market has six main
sectors: clothing and footwear; nappies; food, milk and feeding accessories;
toys; nursery and safety equipment; and toiletries and wipes. All these sectors
have experienced growth, despite the fall in the birth rate over the past
decade. With the rise in consumer expenditure, premium products have emerged
across all sectors offering more features or better design. This has been one
of the major factors in pushing up average transaction costs.
A
significant development in the market has been the entry of new players, led by
own-label products, that have eroded the value of manufacturer brand shares.
However, tighter competition has encouraged new product development (NPD) and
brand investment, thus building the market generically, as well as for the
suppliers involved.
Retail distribution has also seen a shift towards
this market, as more stores have come to stock under-5s products. The grocery
multiples have gained the largest proportion of overall sales in the last 5
years. This has been achieved by widening their product portfolio, as well as
adding competitively priced own-brand lines. Boots remains the leading mixed
retailer, although department stores in particular have enough space to offer a
significant breadth of goods.
The birth rate will continue to fall to
the beginning of the next century. However, older parents and falling family
sizes will continue to encourage higher spending in the under-5s market.
Parents today have more sophisticated tastes and are much more aware of issues
such as safety and child development. Manufacturers and suppliers have already
been able to respond with more effective market segmentation and better
targeting of products. As a result, the under-5s market will continue to grow
from £2.49bn in 1997 to £2.91bn in 2001.
Text © 1997 Key Note
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Last updated by Duncan Nottage 5th March 1999