Demand for shopfitting work had declined in recent years as the financial crisis impacted on retail sales and consumer spending. However, both retail sales and the demand for shopfitting services increased in 2013 and 2014, reflecting the beginning of a recovery in consumer confidence. Some retailers have tried to respond to this recovery in consumer spending by rolling out wider refurbishment programmes and upgrading existing sites to promote their brands and increase footfall.
During the downturn, the nature of shopfitting work changed, with low value, short-term contracts becoming more of a feature of the sector. With retailers cautious about capital expenditure, project values declined and contracts were let predominantly on a competitive basis, rather than on longer-term frameworks as was the case before the downturn. In addition, there has been greater emphasis by retailers on redecorating and giving stores a ‘refresh’, by changing interior fixtures such as lights, carpets and furniture, and by putting in new displays.
The UK shopfitting market is complex and highly fragmented, with a large number of suppliers undertaking a wide range of activities. The sector has seen a relatively high level of consolidation in recent years, which has led to the number of contractors focused on shopfitting declining substantially, though in some areas this has also led to a shortage of specialists to carry out the available work.
The industry also continues to face a number of challenges as retail and leisure trends evolve at a rapid pace and retail companies constantly re-brand and innovate to maintain their competitiveness and respond to changing consumer behaviour. The pace of convenience/ discount store format roll-out programmes, changing consumer habits, shifts in fashion, shrinking retailer budgets and the challenge of shopper expectations on store design and space requirements, are all impacting on the sector and providing opportunities for shopfitters. In addition, the shopfitting market is affected by growth in online retail sales, with physical store outlets contributing less to overall retail sales.
Growth in the shopfitting market is largely reliant on performance of its two main end use sectors, retail and entertainment, which have experienced varying fortunes over the last 5-6 years. With the shopfitting market dependent on the economic climate and the rate at which the UK recovers from the downturn, demand is expected to be unevenly split across retail sectors, with the London retail fit-out market driving demand. The short-medium term opportunities for shopfitting contractors are likely to come from the value and discount retailers and the grocery convenience sector.
“Key drivers of growth in the shopfitting market at present include a focus on smaller convenience food stores in smaller urban locations, significant programmes in the budget hotel, budget gym and cinema sectors, and a strong airport retail sector” said Andrew Hartley, Director of AMA Research. “Technology in store is also becoming an established part of the design process, driven by increasing digitalisation of store interiors and the introduction of a self-service element within shops, restaurants and leisure facilities.”
Going forward, between 2015 and 2019, the UK market for shopfitting is forecast to maintain steady growth, with typical underlying annual levels of growth of around 4-5%, reflecting the projected increase in refit programmes compared with new build schemes. More information can be found at the following link: www.amaresearch.co.uk/Shopfitting_15.html
The ‘Shopfitting Market Report – UK 2015-2019 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.