The UK Non-food in Grocers 2006 report said that Tesco, already the UK's biggest food retailer, is increasing the pace of its non-food growth and will overtake Argos and Homebase owner ARG by the end of this year.
Tesco is adding non-food selling space through mezzanines, store extensions and opening more of its Extra format stores. It is also expanding its internet offer and introducing in-store catalogues.
Last year, UK supermarkets' non-food sales went up by 8.4 per cent, increasing their market share from 8.5 per cent to 9.1 per cent. Verdict forecasts that by next year grocers will account for£1 in£10 spent on non-food.
The total non-food market is set to grow by 2.5 per cent every year, but by just 0.7 per cent when grocers and online retailers are taken out, according to Verdict, leaving little ground for traditional high street retailers to fight for.
Verdict senior retail analyst Alastair Lockhart said: 'Capitalising on their low-price reputations and overriding convenience, grocers' non-food ambitions now stretch to almost every area of the retail market. At the same time they are raising their game in terms of choice, display and store layout. Whereas, in the past, grocers have typically taken a fairly opportunistic approach in their non-food development, they are now placed to take on specialist retailers head-to-head.'
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