Amanda Aldridge on retail: Department stores offer a touch of retail magic

Do you think of yourself as a department store shopper? Probably not. Yet, if you live in a UK city of reasonable size, the chances are that you visit one of the big-name chains on a fairly regular basis. They are an established part of the UK retail scene.

Department stores are under increasing competitive pressure, as the supermarkets continue to extend their product offering into clothing, homeware, electricals and cosmetics - so much so that you might ask when a supermarket stops being a supermarket and becomes a department store. They also face a challenge at the other end of the size spectrum: the brands they sell have widened their product ranges, and many are now opening standalone stores.

Department stores come in for more than their fair share of media criticism. They are portrayed as old-fashioned or lacking in a distinct product offering.

Like all large institutions, they are easy targets; the very name 'department store' sounds a little old-fashioned. Yet this is a group of stores that includes some of the most cutting-edge shopping experiences around. There are an awful lot of good things about the department store sector that tend to be forgotten.

First, they are able to tap into growth areas. Their size gives them the ability to adapt the way they use their selling space, more like shopping centres than 'small box' retailers, but with none of the lease complications.

To reflect this difference, they have even been known to refer to themselves as 'portfolio managers'.

Second, they are less exposed to mistakes in their range of stock than a single-brand operator - the brand management element of their operation is just as important as the portfolio management.

Finally, their use of concession deals gives them a further advantage: concessions generally stock a smaller range than standalone stores, but typically include all the bestsellers, and the six-month concession agreements offered by so many stores afford them great flexibility.

These factors will help the slick operators in the department store sector ride out weakening consumer confidence more effectively than other retailers.

That said, one of the biggest weapons in the department stores' armoury is the iconic nature of many of these shops. The unusual designs, the product mix, the retail theatre, the changing themes - let's be honest, we love it.

It's no surprise that any major city regeneration nowadays is not complete until that big department store name is added to the city's marketing literature. Birmingham is a good example. First, a Harvey Nichols (albeit small-scale) opened, House of Fraser received a facelift and then the Bullring arrived with Selfridges and Debenhams in tow. Would the Bullring development have been received half as favourably without those two anchor tenants to add a bit of pan-ache and class? Probably not.

All of which made me think of the Kevin Costner film, Field of Dreams. 'If you build it, we will come' was the movie's catchphrase. And, like ghostly figures drawn toward Costner's specially built baseball diamond, we do come, inexorably drawn to the retailing novelty value that department stores still offer us.

You can knock the department stores as much as you want (and people have been doing so for quite some time now), but there are sound business and consumer reasons why they are still very much with us. They will keep on building them. And we will keep on going.

- Amanda Aldridge is head of retail at KPMG

30 SECONDS ON ... BIRMINGHAM'S BULLRING

- Birmingham's Bullring shopping centre, built at a cost of £500m, was the biggest retail regeneration project in Europe. It was funded by three property companies: Land Securities, Hammerson and Henderson Global Investors.

- The centre houses 140 shops and is the size of 26 football pitches. It attracted 4.3m shoppers in its first month after opening on 4 September last year.

- The vast, curvaceous silvery-blue roof of the Bullring's Selfridges store was designed by Czech architect Jan Kaplicky from Future Systems. The Guardian's architecture correspondent, Jonathan Glancey, described it as 'a vast cliff of a building, a computer age geological outcrop, as distinctive and eye-catching as the white cliffs of Dover'. However, Glancey damned the rest of the Bullring's architecture as 'sadly, abysmal'.

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