The shopfitting market has increased by 4% in 2016, following steady growth in recent years. Market growth has been driven by leading retailers and supermarkets in particular investing in existing portfolios through fit-out and improvement works. Retailers, particularly the supermarket retailers are all committed to investing in their existing estates to improve and enhance format rather than securing new space. This includes the expansion into convenience, online and multi-channel formats, which are creating an increasing demand for refresh, refit and refurbishment projects.
A number of other key issues are affecting the retail sector including the Government’s overhaul of the planning system affecting retail planning and development; the growing importance of sustainability and ethical retailing and the growth of technology, which is changing how shoppers, retailers and suppliers engage with one another. 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 impacting on store design and space requirements, are all influencing the sector and providing opportunities for shopfitters.
The UK Shopfitting market is complex and highly fragmented, with a large number of suppliers undertaking a wide range of activities, though the sector has seen a relatively high level of consolidation in recent years. Going forward, it is expected that the rate of consolidation activity will slow, however competition continues to be high and companies are increasingly required to provide a wider number of services to their customers. Although smaller companies will continue to dominate the mix, they will continue to be vulnerable in a market that typically offers low margins and where large retailers will often prefer to deal with large suppliers.
In 2017, the value of the UK shopfitting market is forecast to rise by a further 2%, with growth in the short to medium term forecast at around 3-4% per year, reflecting the projected increase in refit programmes compared with new build schemes. The opportunities for shopfitting contractors are likely to come from the value and discount retailers and the grocery convenience sector, along with refits and re-branding programmes in the entertainment sector. Growth of in-store concessions – collaboration between retailers is also likely to continue to grow. In terms of regional opportunities, the London retail fit-out market remains buoyant.