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MP18008

MAPS FOOTWEAR JULY 1998

Overview

Table of Contents

Executive Summary

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EXECUTIVE SUMMARY

The UK footwear manufacturing industry is a long established one, with centres of production in the East Midlands, East Anglia, Lancashire, the West Country and London. The industry has come under increasing pressure from cheaper overseas production bases mainly in the Far East, which has caused some smaller manufacturers to be taken over or go out of business. Domestic production is now dominated by the likes of C&J Clark and a few smaller niche suppliers.

The footwear market is dominated by imports, with a 69 percent penetration in terms of value and 83 percent by volume. The level of imports remains high, especially in terms of lower priced mass market imports from the Far East. Exports have also increased strongly over the last five years, by 25 percent between 1992 and 1996 to 40 million pairs and even more strongly in terms of value by 77 percent to £567m in 1996. This is due to the fact that UK based manufacturers have started to concentrate on high quality premium footwear ranges for the export market.

The retail market for footwear in the UK was worth £4.7bn in 1997, an increase of 9.6 percent on 1993 in terms of value. By volume, the market fared less well, however, recording a decline of 5.8 percent to 213 million pairs in 1997. This suggests that consumers are buying fewer pairs of shoes but are spending more per pair. It should be noted, however, that when inflation is taken into account the growth in value terms is relatively insignificant showing that the market has been somewhat flat since 1993.

The footwear market for the purposes of this report is subdivided into women’s, men’s and children’s footwear, and can also be subdivided by materials used in the manufacture of the uppers, ie Leather or synthetic. The largest sector in terms of both volume and value is that of women’s footwear, accounting for a share of 46 percent and 45 percent respectively of the total market. The women’s footwear market was worth £2.1bn in 1997, an increase of 20 percent on 1993, but with a decrease in the market by volume of 8 percent to 98 million pairs.

The men’s footwear sector accounts for 36 percent of the total market by value and 35 percent by volume, with its share having increased between 1993 and 1997. The market was worth £1.7bn in 1997, down by 8 percent on 1993, while volume sales increased by 10 percent to 75 million pairs.

The children’s footwear market is the smallest in terms of volume and value taking a 19 percent share by volume and 20 percent by value in 1997. This represents a market size of £942m in 1997, up by 36.9 percent on 1993, with sales of 40 million pairs, down by 23 percent.

Market Assessment commissioned exclusive consumer research for this report in May 1998 into the types of footwear consumers had purchased in the previous 12 months. The research was categorised by style, although it should be noted that there is an increasingly blurred distinction between categories.

The research findings show that 72 percent of respondents had bought every-day footwear in the previous 12 months, with sports footwear the next most popular purchase, bought by 56 percent of respondents. In contrast to 1995 when 15 percent of respondents had not bought any footwear at all, only a tiny proportion of respondents had not purchased. Women are generally more likely to have bought shoes than men, as are young people aged 15-34, and ABC1s.

Branding has not traditionally been a feature of the UK footwear market with most footwear sold under retailers’ labels or as own brands. However, since the British Shoe Corporation (BSC), which used to account for 18 percent of the market by value, collapsed in 1997 the market has opened up to more brands. This leaves C&J Clark as the leading UK based manufacturer and retailer of footwear.

The former BSC retail outlets are now under different ownership, with chains such as Shoe Express, Dolcis and Saxone continuing under their new owners. C&J Clark operates retail outlets mainly under the Clarks, K Shoes and Ravel names. Other significant players in the footwear market are The Oliver Group, which owns OliversTimpsons and Paris stores, and The Stylo Group, with its Stylo Instep and Barratts stores. General variety retailers such as Marks & Spencer and fashion retailers such as Next and Burtons are also increasingly important in the retail distribution of footwear in the UK. Sports clothing retailers are also important, especially in the men’s footwear sector.

In 1997, some 32 percent of retail sales of footwear by value are through multiple specialist shoe shops, with sports shops taking the second largest share of sales at 18 percent. Other important sources of purchase include general variety stores and fashion retailers.

Advertising media expenditure on footwear in the UK remains low in proportion to the total market, with total spend of £15m in 1997, representing 0.3 percent of sales. The leading advertisers are Clarks, K-Shoes, Kickers, Bally, Caterpillar and Start-Rite.

Population change in the UK is likely to have an effect on the market, with a projected decline in the number of 15-24 year olds over the next ten years. This will affect the fashion end of the market as young people tend to buy shoes more often than other age groups. The decline in this sector may also affect the sports shoe sector. There will also be an increase in the number of people over 45 who tend to buy fewer pairs of shoes, but demand higher standards of comfort and quality and may also be prepared to spend more per pair.

The prospects for the footwear market up to 2002 are for stronger growth by value after a period of stagnation, with the export market also set to continue to grow. The total market is forecast to reach just over £6bn in 2002, an increase of 27 percent on 1998, with the men’s footwear market set to grow most strongly, by 38 percent to £2.3bn. The women’s footwear market is forecast to grow by 24 percent to £2.6bn while the children’s market will show the lowest rate of growth of only 8 percent to just over £1bn.

The overall future prospects for the UK footwear market are therefore quite positive, with a greater emphasis on branding and quality helping to boost the value of the market and the opening up of the retail market allowing for more niche suppliers to appear. There may also be a slight polarisation of the market between high fashion branded footwear targeted mainly at young people, and comfortable, value for money ranges targeted at older consumers.

Text © 1998 MAPS

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