This week, David Jones announced it will close its New Zealand flagship store. Here are four market insights from a report into the sector by business information firm IBISWorld.
1. Market size
The market size, measured by revenue, of the Department Stores industry is $4.1bn in 2021.
2. Growth vs decline
The market size of the Department Stores industry is expected to decline -15.3% in 2021. The market size of the Department Stores industry in New Zealand has declined 4.5% per year on average between 2016 and 2021, faster than the economy overall and broader retail trade in the country. .
3. Industry perspective
The Department Stores industry in New Zealand is the 5th ranked Retail Trade industry by market size and the 44th largest in New Zealand.
4. Growth factors
The primary positive factors affecting this industry are demand from online shopping and real household discretionary income.
Trends in real household discretionary income influence demand for the products department stores sell. Consumers spend more on home discretionary purchases as their incomes increase, supporting demand for clothing, kitchenware and cosmetics.
Conversely, declines in income limit consumer spending, leading to reduced demand for industry products or a shift towards more affordable brands. Real household discretionary income is expected to increase in 2019-20, creating an opportunity for growth in industry revenue.