Luxury operators are fuelling growth in the £14.7 billion UK department store sector as customers become more selective about where they spend.

High-end operators were the main drivers in 2007, delivering 11.3 per cent growth, compared with 2.7 per cent for the remaining department store retailers. Total department store market growth was 3.5 per cent, with a 4.1 per cent rise estimated for 2008, according to research house Verdict’s UK Department Stores 2008 report.

Of the top 10 department store businesses, Harrods recorded the biggest improvement in operating profit per sq ft between 2005/2006 and 2006/2007. Its rise of£30 per sq ft was followed by Selfridges at£16 per sq ft. They achieved the increase by making existing space more productive, rather than by opening stores.

Verdict lead retail analyst Maureen Hinton said: “These shops are ensuring the store experience matches the aspirational status of the brands they stock. This differentiates them from the rest of the high street and provides consumers with the convenience of having a comprehensive offer in one location with leisure and indulgence.”

The top three department stores, Marks & Spencer, John Lewis and Debenhams, control market shares of 31.8 per cent, 19.1 per cent and 16.7 per cent respectively.

Read more about the luxury sector in this week’s special edition of Retail Week.