A Look at the UK Market
Change Is All Around Us
As we approach our annual gathering at Harrogate and cast an eye back on 2016, we will see the year as the one that changed the economic course of the UK for some time to come. While we saw an initial bounce back from the Brexit referendum, it is clear that consumers have felt the impact on the currency, and footfall in retailer outlets, along with confidence in the economy remains low.
However, within Nursery, numbers of sales continue to drive growth as more parents are encouraged to buy with the drop in prices. Categories driving the value growth within the industry include baby mobility categories, bathing and baby bedding.
Parents spend £1 out of £5 on non-food Feeding products making it the second biggest baby related expense.
While the category declined in the last 9 months, higher number of purchases of breastfeeding products, teethers and soothers has grown the size of the categories within Feeding.
However, a 6% decline in the value of highchairs has had an impact on the overall performance on the category.
With over one third of the baby budget spent on baby mobility options, the purchase of a stroller and a car seat remains the most significant spend that a parent does.
Sales of ISize car seats as well as highback and convertible booster seats continue to grow as the new regulations come into force this year.
Stroller sales declined in 2016 when compared to the previous year, as parents move away from buying travel systems.
Online purchases continue to grow across categories including Transportation.
According to Tullika Bhalla, business manager at GfK: “Despite going through a tumultuous year and concerns about the wider economy, it is unlikely that new parents will reduce spend on baby products. However, with prices likely to rise due to Sterling's devaluation, coupled with rising production costs, promotions and upgrading customers by providing an option of feature-rich products, could prove to be the key to encourage spend in the sector.”
We are grateful to GfK for this research.