IBISWorld Market Research
The industry is facing increasing competition from online stores, department stores and clothing retailers.
Melbourne, Australia (PRWEB) January 30, 2014
The Footwear Retailing industry has lost its footing in the past five years. The industry is highly dependent on economic conditions and consumer confidence, both of which were adversely affected by the global financial crisis. IBISWorld industry analyst Lauren Magner states, “Weak consumer sentiment, subdued discretionary spending, fierce competition and a difficult retail environment are expected to contribute to a decline in industry performance, with revenue expected to contract by an annualised 0.7% in the five years through 2013-14.” However, as the global economy stabilises and consumer sentiment and expenditure improve, industry revenue is expected to grow by 0.8% in 2013-14 to reach $3.3 billion.
The industry has faced increasing competition, both internally and externally. Internally, it is beset by an abundance of homogeneous products that are so easily substituted with other industry products that many retailers have resorted to hefty price cuts. The industry is facing strong external competition from other retailing industries, such as the Clothing Retailing industry and the Department Stores industry, which also offer footwear products. The industry is also facing intensifying competition from online retailers. Many industry players have started their own online stores to launch themselves into the growing internet market. Despite this, the strength of the Australian dollar over the past five years has meant that well-informed customers could easily turn to overseas retailers that provide cheaper alternatives. Over the next five years, IBISWorld expects some improvement to conditions in the industry as Australians loosen their purse strings and consumer sentiment recovers. Nonetheless, pressures from online and other retailers are expected to intensify. According to Magner, “Many players are clarifying their market positions and improving the retail experiences they offer to lure consumers back into bricks-and-mortar stores.” Growth opportunities lie in niche markets that offer differentiated products. The niche market gap will be best filled by smaller players able to provide individualised products and services, rather than big corporations that tend to provide mechanical and impersonal services.
The Footwear Retailing industry is characterised by a low level of market share concentration. The industry is made up of a large number of small retail outlets and most businesses are of small to medium size. In the past five years, merger and acquisition activity has been stronger than usual, and competition has intensified. Players are expected to further consolidate their operations over the next five years. However, competition from department stores and online stores, as well as slow global economic recovery, will limit their ability to grow above the industry average. Major players include Fusion Retail Brands, RCG Corporation, Super Retail Group and Betts Group. For more information, visit IBISWorld’s Footwear Retailing report in Australia industry page.
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IBISWorld industry Report Key Topics
Stores in this industry are primarily engaged in retailing footwear. Retailers typically purchase a variety of footwear from wholesalers and manufacturers and then sell these products to consumers. Generally, retailers will not value add or change products further. Most retailers in the industry sell their products from one or more shopfront and may operate an online store. The industry excludes department stores and online-only retailers.
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