Regardless of whether they sell leggings or sweets, the retailers that are growing fast have invested in their stores, writes features editor Ellis Hawthorne
This week, we published our annual ranking of the UK’s fastest-growing retailers in partnership with CACI – one of my favourite pieces to work on for Retail Week.
It never fails to deliver a list of varied retailers; some old, some new and some you had forgotten about, all innovating or meeting a fresh demand and securing some serious spend in the process.
Together, the brands form a powerful picture of how consumers are feeling – this year’s list gave us themes of health and wellness, the well-documented ‘lipstick effect’ as well as a nod to the growing ‘kidult’ movement, which has seen adults spend more money on nostalgic collectables, trinkets and toys.
But what struck me most was a divergence between brands that operate in retail’s physical realm and those who play online. Regardless of whether they sold yoga leggings or sweets, the retailers that had managed the greatest gains in transaction growth had also invested in their store estate.
These gains are from retailers that have pushed through speedy rebranding as well as those that have created high-end paradises to showcase their brand story, and everything in between.
“Shein and Vinted represent very different shopper priorities in terms of sustainability within fashion, but a similar desire for value above all”
There are several examples of this phenomenon within the ranking. In the case of Morrisons Daily, the McColl’s takeover saw its store numbers rocket by 1,000 and transaction growth along with it. But it’s certainly not all about critical mass. In the case of ultra-aspirational LA-brand Alo Yoga, its considered opening programme (which is now approaching five stores in the UK) has contributed hugely to its popularity on our shores, and its staggering 704% growth is testament to that.
However, for the online-only retailers, our list tells us that it’s all about one thing: price.
Bargain-bucket marketplace Temu was the fastest-growing online-only retailer last year, coming third on the list overall. Shein and Vinted also make appearances for another year, representing very different shopper priorities in terms of sustainability within fashion, but a similar desire for value above all.
Even Adanola, the pure-play athleisure brand that takes a spot on the list, is in many ways a value player within its set – born when its founder Hyram Cook noticed there was a lack of affordable athletic wear that looked fashionable enough to be worn outside the gym. Speaking to Retail Week in 2023 about the brand’s foundation, he said: “At the time, there was Lululemon and Sweaty Betty and I found that you didn’t really need to charge over £100 for a pair of leggings. So, we came in at £40 for our leggings and we’ve never really increased our leggings prices since 2015.”
But, as our list shows, there’s more than one way to sell a pair of leggings. Online, we can see that Adanola’s approach to value will certainly work. Alternatively, if you were to take inspiration from Alo Yoga and open some stores, you might be able to charge up to £138 per pair.
A race to the bottom is most unwelcome for ecommerce retailers, already at a disadvantage when they compete on price and speed of service against Amazon. In a few weeks on Retail Week, we’ll be exploring if online shopping has simply become too boring, so stay tuned to hear about the retailers that are experimenting with immersive experiences, gamification and slick new apps. Next year, we’ll see if they’ve done enough to make this list.
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