Both Harrods and Selfridges have announced impressive double-digit sales growth and grown their combined share of the UK department stores market by 40 percent over the last five years.
Combined the London-based pair are set to take over a fifth of all department store spend in 2017 – despite operating from less than five percent of total department store space.
Meanwhile, few of their UK department store rivals have mastered the art of consistency, with unreliable ranges, mixed experiences, and occasional poor service, losing them loyalty.
Tourism has played a major role in the performance of the luxury players in 2016 and 2017, with total inbound visits to the UK up 4.1 percent in 2016 and overseas holidaymakers to the UK up 19 percent between January and July 2017 (according to latest ONS figures) compared to the same period in 2016.
Luxury brands have, not-so-discreetly, upped their prices to offset falling footfall, taking advantage of increased demand and build in the impact of rising inflation.
Due to the fall in the value of the pound since the UK’s vote to quit the European Union last year overseas visitors have still been able to take advantage of lower prices versus their home market.
Meanwhile, Harrods and Selfridge’s are years ahead of their department store rivals when it comes to offering in store experiences. Other department stores are now catching on to this vital characteristic of a department store – returning to the role these stores played 20 years ago.
John Lewis has heavily publicised its new Oxford store’s various experiences, with a fifth of space allocated to services, while Debenhams has committed to driving growth via third party services, but House of Fraser and Marks & Spencer have stayed quiet.