Brexit: attacks in Manchester and London: a hung parliament and a fragile Conservative minority government, kept in office by an agreement with the main pro-British party in Northern Ireland, the Democratic Unionists. These are some of the headlines for the UK in 2017 which have left some of us worrying about the impact on the UK economy.
Economic Situation in the UK for 2017
The office of National Statistics (ONS) report for August 2017; reveals an increase of 4.2% in prices across the entire retail market over the past 12 months. This is a reflection of wider inflationary pressures. The clothing and footwear industry figures are above the average price increase in the UK of 3.2%. Fortunately the increase in prices of shoes and clothes, is less than the 5% increase in fuel prices which we are paying when filing up our cars at the pumps.
With market woes and inflationary pressures, you could be forgiven in believing that the UK Footwear Market could have shrunk however;
there has been 3.4% average increase in quantities bought in the clothing and footwear sector. Which is great news for some British businesses.
What are the Drivers for this Growth?
The Office of National Statistics (ONS) reflect that the key drivers for growth in Clothing and Footwear are:
1. An increase in internet sales
2. Sales promotions ending in August
3. Back to school shoe purchases
Which Larger Top Brand has Larger Sales?
Top brand, handcrafted footwear in larger sizes is in greater demand, according to Walktall, the Europe wide online shoe retailer specialising in sizes 12 to 19.
Sales by Walktall of the Barker marque, increased by 54% last year. This longstanding UK-based brand continues to thrive, a success story for their internet sales. Significantly, customers who purchased Barker shoes from Walktall last year also favoured handcrafted boots by the Australian manufacturer RM Williams. This signals a demand for upmarket, handcrafted footwear.
“This level of increase is highly significant for a niche retailer such as Walktall, which offers solely larger sizes,” says Director Jim Lockyer. “We now offer seven different styles of Barker shoes and seven styles of RM Williams boots. As a company, we really like to get behind these traditional brands, which continue to thrive by creating a handcrafted product of excellent quality.”
For more information on Walktall visit: www.walktall.co.uk
Large Brands ‘v’ Small Businesses
Whilst is appears growth and confidence has not been adversely impacted within the UK, it feels early days to remain too optimistic about the future for all businesses within the British Footwear Sector. What is evident is the increase in raw material costs, is having an impact on retail prices. Conversely the drop in the value of the pound has made buying British products very attractive. This is superb if you are manufacturing shoes in the UK, or a large business that can absorb the increased cost of products whilst increase the marketing spend for the Internet channel.
On a personal note my small on-line mens shoe business has been negatively impacted by increased costs for my products. I am buying from Europe with a reduced pound. I have had to reduce my retail prices to attract sales, this has greatly reduced my margins in which to make a profit and ultimately what I pay myself rather than put capital back into the business. To balance the books, I have had to take a part time job (at a local bike shop which fills my heart with joy) in order to try to keep my business afloat. Whilst living the dream is great, the road to success is certainly not smooth or easy.
It is evident that for me (a small start-up business) to compete against the larger brands, I will have to:
1. Have an internet presence on a global scale
2. Presence in niche markets
3. Invest into skilled labour to market my business successfully
4. Create cash flow
All of which require skills I currently don’t posses, capital (when bank loans are few and far between), patience and determination.
The Future is….
The British footwear industry has a much respected heritage which I have explored in other blog posts. I am very proud to be part of this industry as an observer and a fledgling business. The brands such as Walktall and Clarks are proof that if you get the business model right, the growth is there. The UK Fashion and Footwear industry continues to grow despite adverse conditions because it is embracing Internet sales, reinvesting in skilled labour and responding to customers needs.
I would love to hear your views on what you feel are the drivers behind the continued UK Footwear market growth. Do you feel there is adequate support for small businesses in this market? Which footwear brand do you admire and why?
Thank you for reading the bloggings of a shoe enthusiast.
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