A bargain basement approach to uniforms has depressed sales value but now Mintel is forecasting a return to growth as schools demand better quality, as Sonya Hook reports

A combination of aggressive pricing, multipacks and big campaigns has given the supermarkets almost 40% of the £959m schoolwear market [Mintel Schoolwear Retail Intelligence].

Unfortunately, the size of the pie has shrunk. Sales slumped 11% in value between 2007 and 2010 thanks largely to supermarkets squeezing prices and recession-hit parents cutting back. The schoolwear department was stuck perennially in the bargain basement. Or so it seemed.

Over the next few years, value growth is expected to return, with Mintel forecasting a 19% leap to £1.14bn by 2015. So why the turnaround in fortunes? And could the writing be on the wall for cheap school uniforms?

Supermarkets have long appealed to busy, cash-strapped parents by promoting uniform bundles, such as Asda's complete uniform for £10 and schoolwear in multipacks, which are so popular that 62% of Sainsbury's schoolwear customers favour them for certain items, claims Mintel in its report.

The bundle has been a lucrative area for Tesco, too. "Our back-to-school bundle deal proved incredibly popular with customers," says Richard Jones, the retailer's director of UK clothing.

Multipacks have also attracted strong sales among parents of primary school-aged children. "This could be because younger children are less careful with their clothes and are more likely to stain or tear them," says Mintel senior fashion analyst Tamara Sender.

There's a downside, however, to such rock-bottom prices. "Many garments are being sold as loss leaders by supermarkets in order to tempt food shoppers into their clothing sections," notes Sender.

Supermarkets have also lost out by limiting their 'back to school' seasons to June to September. According to Philip Linz, operations director for independent schoolwear supplier, Clive Mark Schoolwear, and executive officer of the Schoolwear Association, Clive Mark is busy all year round, "particularly as people move around the country more for jobs".

Although the market is set to grow in value on the back of an anticipated increase in the number of four to 11-year-olds and, of course, growing commodity prices, the supermarkets face stiffer competition from independent schoolwear specialists than they have for a long time.

Over the last couple of years, there has been a discernible move by schools to require higher quality uniforms. Indeed, Mintel notes that if it weren't for the introduction of stricter uniform policies at secondary schools and the launch of new academies requiring pupils to wear smarter (and more expensive) garments, the decline in sales of schoolwear would have been more severe.

Linz confirms this. "Senior schools are having more and more bespoke items," he says. "We have maintained a stronger foothold with senior wear because of the rise of new academies, which are looking for completely new uniform rebranding."

The mults have responded to the renaissance of the independents by trying to challenge their dominance in embroidered uniforms. Tesco launched its own embroidery service last year, rolling it out nationwide through its online channel.

Linz claims that the service hasn't dented sales of its own embroidered garments. "We haven't been greatly affected by multiple retailers' attempts to sell embroidered garments," he says. "We build up relationships with individual schools."

The independents also believe they have the upper hand when it comes to PE kits, particularly for senior schoolchildren. Demand for such clothing is growing, says Linz. "Schools are becoming more competitive in sports," he says. "Now kids have more pride in what they wear. PE kit growth is massive for us."

The independents will need to watch their backs though. Tesco reportedly plans to offer more bespoke sportswear in the future and Sainsbury's is also reviewing its PE offering. "We're expanding our range of PE garments so that we offer mums everything that they need to kit out their children for the new school season," says John Carolan, Sainsbury's head of buying for childrenswear.

The supermarkets have been working to appeal to fashion-conscious teenagers, too with varying degrees of success. In 2010, Tesco launched a miniskirt as part of its school uniform range, calling it Hitch and Stitch. The skirt less than 30cm long could be stitched around the hem to raise it further. Many schools banned the skirt, prompting the supermarket to withdraw it. Marks & Spencer, meanwhile, has seen success with its fashion schoolwear section, which offers more trend-led skirts, trousers and blouses.

There is also their online clout to consider. It is only relatively recently that the supermarkets have started driving their online offers in an attempt to boost sales outside the traditional back to school period and now that they have, sales are likely to grow exponentially.

The price is right
Whether buying online or instore, pricing remains key in this market, with parents reluctant to pay over the odds for clothes soon to be damaged or outgrown. The supermarkets will always be better placed to deliver uniforms at rock-bottom prices. Asda stole a march on its rivals last June, offering a full uniform for £10, reportedly selling two units per second in the first week post-launch. [Mintel]

Sainsbury's has significantly grown its share of the market in the past four years, and last year offered 50 school uniform products in its Tu clothing range, with 12 items priced at £2 each. Morrisons also had school trousers and skirts available last year at £2 each. "Supermarkets have got it bang on," says Kantar Worldpanel analyst Elaine Giles. "In the recession, adults wanted longer-lasting clothes, but this doesn't apply to kidswear. People don't want to pay much for these items."

Linz, however, puts some of the supermarkets' success down to clever marketing. "When one of them claims to be selling a uniform for £10, what isn't made clear is that it isn't a whole uniform, it is just components of it."

Regardless of how independent rivals perceive their marketing, there is no denying the supermarkets are boosting ad spend to win market share. Asda was the biggest supermarket spender last year, investing £2.4m in support for its schoolwear and childrenswear between January and November 2010, and Tesco significantly increased its childrenswear ad spend to £1.8m in 2010 [Nielsen].

Some experts believe that rising cotton prices and manufacturing costs will put an end to bargain basement schoolwear. "The price of uniforms is set to increase and parents will have to get used to paying slightly more," says Sender.

The impact is already being felt, says Linz. "Suppliers put their prices up 10% at the start of the year and they are now warning us of further mid-season increases of about 5%, which is extremely worrying," he says. "We may have to put our prices up but we are wary of what the supermarkets will do."

Not everyone is convinced they will put their prices up though. "In any other market they would have to, but I think they see it as a loss leader anyway, so they will have to continue to offer that headline price," says Giles. She does note, however, that there is a bit more of a quality message coming through from supermarkets, and says that the mults are more likely to extend their ranges to include higher value items.

Tesco's Jones agrees quality is becoming increasingly important to consumers. "We listened to our customers and made improvements to the core range, while still ensuring great value."

It's a line echoed by Asda, which launched a 100-day guarantee campaign in 2009 promising to give customers their money back if they were not satisfied with the quality of the product during this period. Sainsbury's shoppers, meanwhile, can now buy longer-lasting and therefore higher quality Teflon-coated skirts and trousers across the majority of this year's range.

"These have also been made with adjustable waists to provide a perfect fit and trousers include secured hems," says Carolan, with a nod towards the contentious issue of larger uniforms.

With parents demanding an ever-greater range of uniforms, from the sturdy to the over-sized, the supermarkets will have to look beyond pricing if they want to maintain their 40% market share.

Focus On Back To School