UK APPAREL RETAIL ENVIRONMENT CHALLENGING
In the UK, the top retailers list included companies like Aldi, Amazon, US, TK Maxx, H&M, Inditex, Uniqlo, Gap, Urban Outfitters/anthropologie, Decathlon and Victoria’s Secret.
While Aldi has come out on the top as one of the largest international retailers in the UK, Amazon is still trailing by a considerable distance. Retailers like H&M, Ikea and Victoria’s Secret have very distinctive brands. However, the UK retail scene is extremely competitive. Gap is a prime example of a retailer that has arrived with a strong brand, but has since lost much of its lustre. With its UK business in terminal decline, and now accounting for less than 2.5% of its global sales, it remains to be seen how much longer Gap will remain committed to the country.
UK remains a challenging market for overseas retailers also because of higher rents and business rates than in their home countries. They also need to win over savvy consumers with lots of options. It therefore takes time and effort to truly conquer the UK market and many international retailers find that they don’t have the persistence or resources to pull this off. There is also a sense that overseas retailers might be overestimating the willingness of UK consumers to pay top dollar for their brands. Straight conversions of prices from dollars to the pound have been the order of the day for many US fashion retailers, but in a marketplace where discounting is already so widespread, this tactic does not impact demand.