Supermarkets are top UK gift locations, department stores second - GlobalData

By

Sandra Halliday

Published
May 1, 2019

The gifting market in the UK is dominated by a major supermarket chain and an e-tail giant, but department stores remain key gifting destinations while other supermarkets also have a major opportunity to make it big in this category.

That’s according to the latest report from research specialist GlobalData with its All Year Gifting in the UK 2019 study saying that Tesco and Amazon take the top two places in the market as a whole. The company spoke to 3,000 UK consumers to get its results.

But despite Tesco and Amazon’s strength, department stores remain popular among consumers for purchasing gifts for occasions such as weddings and birthdays, as 44.9% of UK consumers who bought a gift in a physical location bought from a department store. 

But with the department stores sector under pressure and struggling big names such as Debenhams and House of Fraser closing stores, “other retailers should position themselves to gain share of gifting spend,” GlobalData advised.

Overall, it said that department stores are the second most popular physical location for buying gifts with Debenhams currently being the eighth most popular gifts retailer and John Lewis 10th.

Retail analyst Emily Salter said that the current popularity of department stores “is bolstered by the presence of branded products across a number of sectors, more premium items and a perception of being an appropriate location to purchase gifts for special occasions. Department stores are the most popular for purchasing gifts for weddings and engagements, as quality is the most important driver of retailer choice and gift recipients direct purchasers to department stores due to the presence of gift list services.”

But will the closure of Debenhams and House of Fraser branches undermine their positions in the gifts market? GlobalData thinks it could, unless they do a good job of convincing shoppers to buy from their webstores. "As most Debenhams and House of Fraser shoppers are unlikely to have a branch of the same retailer nearby, the retailers must focus on persuading these shoppers to purchase online with them after store closures,” it said. “Otherwise, the grocers and Amazon are well positioned to steal this gifting spend from department stores.”

The report also said that department stores need to focus on promoting the quality of their ranges, especially for more special occasions such as engagement and new baby gifts. Low prices should also be highlighted as 53.1% of all-year gifting shoppers consider this when choosing where to buy.

Emily Salter added that supermarkets “are in a good position to capture gifting spend as they already offer a wide range of products at low prices, but to entice more shoppers they must improve their reputation for good quality. Amazon is set to grow in popularity due to the appeal of its often lower prices, vast product range and the convenience it offers, especially to Prime members.”