UK Footwear & Shoe Market
UK – November 2013
1. Market overview
UK footwear market
In terms of total footwear consumption, the World Footwear Yearbook 2012
ranked the UK consumer industry the ninth largest within the global market in 2011.
With an estimated 2.1% world share of footwear consumption by quantity (with 372
million pairs of shoes consumed in 2011), the UK is one of the most integral footwear
markets on the globe. This said, its production is estimated at only 5 million pairs,
resulting in a large reliance on imports in the industry. According to National
Statistics’ Consumer Trends publication from Q1 2013, the UK market for footwear
in 2012 had a value of £8.39bn (at seasonally-adjusted prices), accounting for 0.8%
of total household final consumption expenditure (£991.09bn) and 14.6% value of
total expenditure on clothing and footwear market (£57.61bn).
UK footwear market, by gender and age
Using National Statistics’ Family
Spending figures as a guide, Key Note
estimates that £4.25bn was spent on
women’s footwear in 2012. Women are the
main consumers in the footwear market
generally, due to a greater interest in
fashion. The sector share is 50.6%.
Men’s footwear is estimated to have had a
market value of £2.6bn in 2012, which
although accounting for a lower
proportion of the total footwear market,
portrays a higher overall growth rate over
the review period, with a 22% increase
seen since 2008. Sector share is 31%.
Children’s footwear is the smallest sector
of the market in terms of age group, and
was worth an estimated £1.55bn in 2012.
Between 2008 and 2012, the market
portrayed a growth of 7.2%. Sector share is
18.4%.
Shoes sizes among the population
The most recent data for the footwear
market in the UK in terms of shoe size
for men and women was produced in
2001, however there is not likely to be
much variation from the figures for
this year in the current consumer
market.
The British Footwear Association
(BFA) found that the most common
shoe size for men in the UK was 8½,
while 5½ was the most common size
for women, both representing 15% of
the male and female populations,
respectively.
Apart from sports footwear brands, the
majority of shoe retailers do not stock
half sizes of footwear, thereby the most
popular sizes purchased are in fact
expected to be 8 and 9 for males and 5
and 6 for females, with size variation
between brands and styles of shoe
determining whether the consumer
rounds up or down to the nearest size.
Types of footwear
The World Footwear Yearbook 2012 analysed the type of footwear traded
within the UK by quantity, thus providing further insight into the popularity of
footwear styles and materials in the UK market. Segmented into five sectors —
including waterproof footwear, rubber and plastic footwear, leather footwear, textile
footwear and other footwear — statistics show that in 2011 the sector with the most
imports into the UK was rubber and plastic footwear with a 36% share. This also
accounted for the greatest export value, at 49% of the export market share, outlining
that the UK’s main production and consumption within the footwear industry comes
from this sector. Leather footwear was the second most popular shoe type in terms of
both exports and imports in the UK, with a 26% share of both trades, while
waterproof footwear accounted for the lowest share, worth just 3% of all footwear
imports, suggesting a much narrower market for this sector of the footwear market.
Shoes represent the main sector in terms of footwear type and style, estimated as
being worth 37% of the total footwear market in 2012. 59% of those surveyed by
Kantar Media reported purchasing in the ‘shoes’ category of footwear, making this
the most popular sector of footwear type. This is most likely due to the fact that this
sector covers footwear as an everyday necessity as well as very on trend fashion
footwear.
Sports footwear accounts for around 23% of the total footwear market in the UK.
Worth almost a quarter of the total footwear market, sports footwear has become
increasingly popular in recent years as many leading sports brands have widened
their consumer base as producers of both functional and fashionable footwear.
Forecasting footwear
Below is the forecast growth rate of the UK footwear market as estimated by Key
Note between the years 2008 and 2017. This 10-year period is expected to portray a
considerable growth of 49.8% from £7.22bn in 2008 to £10.81bn in 2017.
2. Footwear retailers
Footwear retail industry
The Footwear Retailers industry has
endured a rough ride over the past five
years. Increased competition from
emerging rivals such as clothing
retailers and supermarkets has had a
major effect on revenue. Clothing
retailers typically have a wider range of
products that are on-trend, while
supermarkets have expanded their
stock to include cheaper versions of the
products sold by specialised retailers.
Specialist footwear retailers now
account for just under 40.0% of the
total footwear retail market, down from
over 45.0% just five years ago. This loss
in market share is partly the reason for
the revenue decline.
Major companies
C&J Clark Ltd: Clarks currently operates as both a wholesaler and retailer in the United
Kingdom, and its UK retail sales are estimated to account for approximately 35.0% of
group revenue. It has established a niche as a specialist, service-based retailer in the
United Kingdom to differentiate itself from the discount stores that have flooded the
market in recent years. UK outlets remain the company's dominant retail channel.
However, international markets are becoming increasingly important as UK sales remain
static. Over the five years through January 2014, UK retail revenue for Clarks is estimated
to increase at a compound annual rate of 0.1% to total £515.2 million. The company has
remained steadfast in its commitment to maintaining a strong brand position and
substantial retail presence. However, tough industry conditions have affected sales, as
consumers have significantly reduced expenditure on footwear. Competition from external
retailers, particularly supermarkets, that offer cheaper alternatives to Clark's popular
school shoes have affected sales.
Office Holdings: Office has emerged as one of the biggest footwear retail chains in the
United Kingdom over the past five years. The company operates subsidiary retail stores.
Offspring was launched in 1996 and retails fashionable sporting footwear. Poste is an upmarket boutique that offers a selection of designer men's shoes. The concept was launched
in 2000 and was followed by Poste Mistress, which offers designer women's footwear. The
Office retail chain sells men's, women's and children's shoes, including sporting footwear.
The company currently operates over 80 standalone stores in the United Kingdom,
including three Offspring stores and Poste and Poste Mistress boutiques. It also sells
through concessions in department stores such as House of Fraser and Selfridges.
Major companies
Schuh Ltd: Schuh currently operates over 90 stores across the United Kingdom
and is reportedly planning to open more stores, refurbish existing stores, improve its
internet service and expand its office and central warehousing facilities. At present
91.0% of the group's revenue is generated in the United Kingdom. In June 2011, the
chain was purchased by US retail conglomerate Genesco for about £100.0 million in
order to help further its international ambitions. Since the purchase, Genesco has
already stated that its profit grew 54.0% during the third-quarter of 2011 thanks to
the activities of Schuh Group. Schuh has experienced significant growth in the
United Kingdom over the past five years. Following the purchase by Genesco, the
company's financial reporting month was changed, making it difficult to compare its
performance over the five-year period. However, IBISWorld estimates the company
has grown at a compound annual rate of 15.8% in the five years through 2013-14,
with UK revenue totalling an estimated £239.1 million. The company has been
helped by its aggressive expansion through its stores and its ability to stock the latest
trends. Schuh has also employed various cost-cutting efficiencies, which have kept
profit margins strong. Growth of 12.9% is expected in 2013-14 as its new stores bring
in more customers.
3. Footwear manufacturing
Footwear manufacturing industry
Footwear imports account for a very
large proportion of total domestic
demand, which continues to increase
each year. In 2012-13, footwear imports
are estimated to account for 91.3% of
domestic demand, up from 89% in
2007-08 and 63.5% in 2000-01. This
rise has been due to increased footwear
output from China and other low
labour-cost countries, and the inability
of UK footwear manufacturers to
compete with these foreign firms. The
domestic industry slumped in the early
2000s due to increases in low-priced
competing imports, and is not expected
to significantly recover in the future.
The main companies continuing to
operate successfully in the industry
mainly offer high-end and branded
footwear products that are popular in
the luxury markets and for export.
Major companies
New Balance: In the United Kingdom, New Balance employs 210 people at its
manufacturing site in Maryport, Cumbria, producing 28,000 pairs of shoes a week.
Almost 90% of the UK company's revenue is from exports into European markets.
The factory handcrafts almost all New Balance running shoes and heritage classic
shoes, and has recently introduced the technology to begin manufacturing styles
from its cross-training fitness range. In total, New Balance in the United Kingdom
had 210 employees at the end of 2012, including its warehousing and other facilities.
This was down from over 300 at the end of 2005.
Beaconsfield Footwear Ltd: Beaconsfield Footwear is a footwear manufacturer
based in Skelmersdale and operates under the brand name Hotter Shoes. The
company was established in 1959 and sells its shoes, boots, sandals and slippers
online, via its 19 Hotter Shoes stores and within over 200 independent footwear
retailers across the United Kingdom. The company had over 430 employees in 2012,
up from 255 in 2005, as increased demand and sales drove company growth. Its
footwear products are manufactured in the company's Lancashire factory, with 1.6
million pairs produced in 2012, making it the largest footwear manufacturer in the
United Kingdom by volume.
Major companies
Church & Co: Church & Co Limited was established in 1873 and is based in
Northampton. The company is a manufacturer of high-end men's and women's
footwear, which are sold in company stores in Europe, the United States, Hong Kong
and Singapore. Church's products are also sold via stockists around the world. All of
Church's men's welted shoes are manufactured in Northampton. It can take up to
eight weeks and 250 manual operations to produce a pair of Church's Goodyear
welted shoes. At the end of 2011-12, the company had approximately 400 employees,
although this was down from over 550 at the end of 2007-08 as Church's looked to
cut costs to remain competitive and increase productivity. IBISWorld estimates that
company revenue will increase at an annualised 9.5% in the five years through 201213. For 2012-13, the company's exports are estimated to account for 63% of total
company revenue, up from 60% in 2007-08.
4. Corporate activity update
Clarks: brand remodelling in the UK
According to recently published statistics from
parent company, C&J Clark Ltd, 58% of revenue
generated from British family firm Clarks comes
from abroad, especially the Asia Pacific and
North America markets. In this sense, Clarks’
stability in the footwear industry is not due to its
market position in its domestic setting, where
consumer cautiousness is rife and the brand
identity is deemed unfashionable and lacking in
style. These overseas markets view the brand in a
more fashionable light, with growth also noted in
e-commerce sales within these regions. Although
continuing to be the UK market leader for
children’s first shoes and school shoes, Chief
Executive (CE) of Clarks, Melissa Potter, has
announced that a brand remodelling is being
established with a particular focus on fashion
trends, while maintaining comfort and
affordability. Queen of the Shops Mary Portas
has also been involved in the attempt to reestablish the company in its home market, with
her consultancy agency Yellow Door being
responsible for much of the company’s current,
more youth-focused marketing campaigns.
Hunter: aiming for standalone stores
According to an article published by Property
Week on 2nd August 2013, British Wellington
boot brand Hunter is reportedly looking to
move out of third party department stores and
footwear retailers and into new own-brand
standalone stores. The British brand which
has a 150 year-old heritage has become
increasingly popular in recent years,
establishing itself as a key competitor in the
youth festival-wear market, and so is
understood to be considering opening its first
flagship store and first line of standalone
stores in central London locations.
Shellys: appealing to the masses
In 2008, Stylo PLC sold the Shellys London
UK footwear brand to Hong Kong footwear
supplier Eternal Best Industries and closed its
flagship Oxford Circus store — formerly the
most famous footwear store in the UK. The
iconic women’s footwear brand, with a longstanding British heritage, is facing a revamp
after the relaunch of the brand’s e-commerce
store in 2012 and the announcement of a
takeover by luxury Canadian footwear brand
Aldo. Aldo is launching the new image of the
UK brand for the Autumn 2013 season, which
aims to return the footwear to its roots of
young, British street style but with a lower
average selling price in order to appeal to the
masses of the young fashion conscious target
market. According to Drapers online, Shellys
London will be stocked by ASOS and in
department stores within the UK market and
is also expected to be launched into European,
Canadian, Far Eastern and US markets from
August 2013 onwards.
Shoe Zone: banking on budget
Shoe Zone, the budget retail chain which focuses on large volumes of low-priced,
low-quality footwear, is using the recent closures of other high street stores, caused
by economical difficulties, to expand its portfolio of outlets. The group closed 131
Stead & Simpson stores that were under-performing in late 2012, leaving just over
550 outlets. However, the Chief Executive Officer (CEO), Anthony Smith, has
reported that this is not a narrowing of the business as it is now seeking outlets in
better high-street locations. Smith suggests that the changing property market and
recent retail closures of other companies are allowing the chain to seek retail space
at lower costs, in better locations and with shorter more desirable leaseholds.
5. Future trends and current issues
Seasonal changes
Due to the unpredictability of the British
weather, leading footwear retailers in the UK
are facing high levels of clearance stock on the
high street and online, while some stock
remains limited, as retailers are unable to
adapt quickly enough to meet changing
weather patterns. Drapers’ online report
found that many UK high-street footwear
retailers had suffered a loss in sales in Spring
2013 lines, due to the extreme weather
conditions deterring consumers from
shopping. In response, many footwear
retailers are proposing that UK selling seasons
to be adapted to reflect the changing weather
patterns, with Drapers reporting that only
30% of footwear retail brands surveyed
believe the 2-season model still works in the
current UK climate.
Techno-wear
Innovation in clothing technology provides key selling points for footwear brands,
especially among performance technology within sports footwear. The global sports
footwear leaders, Nike and adidas, are both constantly innovating their performance
footwear to create the very best in running technology, designed both for world class
athletes and the everyday individual interested in fitness. The new adidas Energy Boost
Running Shoes have a midsole unit with thousands of energy capsules which store and
unleash energy to the wearer, being 30% more temperature resistant than standard EVA
foam soles. The competing range from Nike — the Flyknit Lunar Running Shoes — uses
Flyknit technology, making the shoe extremely lightweight at just 226 grams (g) per shoe,
while Flywire threads provide a snug, sock-like fit to the foot.
The latest technology of footwear is also seen to be paving the way in terms of medical
advancements. A brand new concept in footwear innovation has reached the UK market,
with a unique design combining podiatrist designed biochemical orthotic technology in
modern stylish footwear designs. The Andrew Weil Integrative Footwear Range, exclusive
to Simply Feet — the specialist footwear retailer and footcare experts — is a new creation
released in time for Spring/Summer 2013 aimed at restoring the natural foot alignment,
function and efficiency of the wearer. While regular orthotic technology is usually found in
unsightly functional footwear, this new range has managed to merge function and fashion,
with the shoe structure helping to reduce over pronation and alleviate associated heel,
knee and lower back pains, in addition to relieving tired legs, while having the appearance
of contemporary styles in an array of on trend colours.
Techno-wear: GPS brogues
GPS brogue shoes are a concept design that has been proposed by a British designer,
Dominic Wilcox. The idea is to upload a destination to these shoes and then help
them ‘light’ the right path for you. The GPS brogue shoes have a GPS sensor in the
heel of the left shoe. Once you click the two heels together, the sensor is activated.
You can then feed a destination with your laptop via a USB connection. Once the
sensor has the destination, it will prompt the LEDs on the side of the left shoe to
indicate which way you should walk. You can also see the progress of your journey
through the status bar on the right shoe. The bar comprises of red LEDs and
progresses as you near your destination, thus giving you a fair idea of how close you
are…
A wider consumer base?
With the male individual in the UK becoming increasingly involved in following the
latest fashion trends, there is a potential gap in the market for more men’s footwear
brands and companies, or perhaps the expansion of current brands into a more
fashionable domain of the industry. An article published by The Telegraph on 8th
August 2013, outlines that a wider range of footwear brands are reaching out to
male consumers, as opposed to solely focusing on the overcrowded female market.
Sports footwear has become increasingly fashion-focused in recent years as the
cyclical cause and effect of the male fashion footwear industry is merging with the
practicality of the sports footwear function. Therefore nowadays male consumers are
known to buy multiple pairs of trainers as opposed to merely a single pair as a
necessity, and this is something which is beginning to filter into the high-fashion
smart shoes sector.
A further gap in the market coming to light is the niche market of footwear designed
especially for consumers with minority requirements in terms of size, fitting and
shoe style. The mass production of footwear which dominates the market at present
does not cater well to suit this narrow sector, with the number of specialists being
significantly lower than decades ago. If companies are able to create ranges to suit
the needs of these areas of the market they will be able to potentially find a unique
selling point that will establish them as leaders in the footwear market. Fashion is
becoming more widespread and so the market is expected to develop further to
provide key trends and styles to those whom it is not often available for.
Media outlets: embracing the social
With e-commerce reportedly accounting for 12% of consumption in the UK footwear
market, as stated by the World Footwear Yearbook 2012, developments in social
media are expected to contribute to increased brand awareness. Social-networking
sites are already popular with the large brands and online advertising campaigns, as
they allow brands to reach a much wider consumer market. As footwear, in
particular fashion footwear, is largely purchased by the younger generations, there is
a considerable need for footwear brands to utilise the very latest technology in order
to reach out to their main consumers, who are also very tech-savvy. Smartphone
applications (‘apps’) are also allowing consumers and retailers to have a virtual
relationship while on the move.
Luxury fashion footwear brand Jimmy Choo elevated its social media capabilities
with its Catch-a-Choo Foursquare 2010 campaign, in which a social media platform
was used to check-in live at various locations across London for women to race to in
order to be the first to get their hands on a pair of the new collection trainers. Social
media agency FreshNetworks London reported a 33% rise in the brand’s trainer
sales surrounding this campaign, and Jimmy Choo has more recently been focusing
its media campaigns on Google+. The larger brands do naturally have a greater
expenditure to fund the latest campaigns, yet there is the potential for smaller
companies to do the same, as this provides a relatively low cost solution to
marketing. It thereby seems that as online and social media becomes more
advanced, the means for footwear companies to reach out to consumers will become
increasingly diverse also.
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