Asos will drop out of the list of Britain’s biggest retailers by 2027 as it gets overtaken by Shein and Zara owner Inditex, Retail Week can reveal. 

Shein website on phone against Shein background

Shein will push Asos out of the UK’s top 30 retailers by 2027

According to Retail Week’s annual ranking and forecast of the top 30 retailers in the UK, home-grown retailer Asos will lose its current position as the 26th biggest retailer in the UK by 2027 as it struggles to keep up with fierce competition from global players. 

Analysts at Retail Week’s sister brand Retail Navigator by Lumina Intelligence forecast a compound annual growth rate (CAGR) of -2.5% for Asos, the only retailer in the top 30 to be forecasted a loss. 

Conversely, Chinese fast-fashion juggernaut Shein will storm through the ranking 22 places with a staggering 23.3% CAGR, more than double any other retailer on the list, to become the UK’s 24th biggest retailer, with an estimated turnover of £2.5bn. 

Retail Week data and insights director Lisa Byfield-Green said: “Shein is working to legitimise its position across Europe and particularly in the UK, and that’s something that is working in its favour.

“The company opened offices here in November and acquired Missguided in October so that will be taken into account in the five-year forecast.

“It’s too early to say what Shein’s plans are with Missguided as there hasn’t been much time to do a lot yet, but it really shows a strong commitment to the UK market.

“Another positive is Shein’s widening of its appeal through social media. It is really keen to get a foothold and a reputation in the UK, and recent activity demonstrates it is actually starting to now think about it as a key market.”

Challenging environment

Asos’ total sales declined by 10.1% to £3.5bn in the year to September 3, 2023, UK sales fell by 11.8% and losses at pre-tax and operating levels widened too, with a reported pre-tax loss of £296.7m. 

“Asos has seen a very challenging environment,” said Byfield-Green.

“It says the economic headwinds that we’re seeing particularly affected younger shoppers and some of the evidence does point to that, but that’s not the whole story.

“Customer loyalty to Asos is not that strong and other retailers are undercutting it on price. If customers don’t have a lot to spend, why go to Asos rather than Shein?”

Spanish fast-fashion giant Inditex is also set to play a part in bumping Asos out of the running. The Zara owner is set to climb seven places to enter the ranking at 26, overtaking Nike and Dunelm, with a CAGR of 10.2% taking it to £2.4bn. 

Much of this growth is accredited to investments in its store estate, said Lumina Intelligence senior retail analyst Beth Bloomfield.

“Inditex continues to build momentum in the UK through expanding its number of Zara stores – with new openings in Bath and Glasgow at the end of 2023 – as well as pushing its other banners,” she said.