European retail in 2014 has been a mixed bag. Talk to London-based high-end fashion retailers such as Ted Baker or Hackett and business has been pretty good. Both have been busy opening new stores, reconfiguring old ones and expanding internationally. The same might be said at the discount end of the spectrum, providing the name is Primark. The Dublin-headquartered company has managed to meld of-the-moment fashion, store design of the kind that would shame many midmarket operators (with savvy use of digital displays, too) and competitive pricing.
But for every winner, there are losers. Again, take Primark: In mainland Europe one of its major competitors is C&A, the Madrid to Moscow value fashion retailer. Visit a location where Primark has set up shop this year and the first thing the observer will notice is a sea of buff-colored Primark bags being carried around. However, if there is a C&A nearby, it is conspicuously short of shoppers.
In a time when money remains relatively tight, with Italy and France currently on their knees and even Germany not the retail force it once was, value is the order of the day. But discount is not the be-all and end-all. Shoppers in 2014 have tended to frequent stores that look good as well as offer value and this is where Primark has scored (its director of store development arrived at the retailer via TK Maxx and Louis Vuitton).
Then there are the supermarket wars. In France, Carrefour has been wondering what to do with its massive hypermarkets now that big footprint stores are on the decline. Generally, this has led to price wars in the grocery sector and to the rise of the convenience sector, irrespective of country or city. In the U.K., convenience formats Tesco Express and Little Waitrose are examples of shifting shopper habits as consumers shop more frequently while basket sizes shrink. And knocking on the door of the mainstream grocery retailers have been the discounters, which continue their onward march thanks to Aldi and Lidl, both of which have upped their in-store game.
So where does all of this take us? For the fortunate fashion and department store few (think Selfridges and Galeries Lafayette) 2014 has been relatively benign. But for many it’s been another rocky ride, although less so than 2013. No sign of a let-up as we move into 2015, either.