The department stores of the 21st century. That is what Verdict Research, the retail analysis company, today labelled supermarkets after a 59 per cent jump in their non-food sales last year.
"Grocery hypermarkets are becoming 'hypermental' stores as increasing non-food ranges are added and sold with greater authority. Leading grocers are becoming the new department store operators of the future."
The five leading grocery superstore operators – Asda, Morrison, Safeway, Sainsbury and Tesco – have added 4.9m sq ft of new non-food selling space in the past five years, making a total of 18.2m sq ft compared with less than 10m a decade ago. Tesco (2.1m sq ft) and Asda (1.2m sq ft) have led the way.
Verdict points out grocers are already Britain's largest retailers of health and beauty products, with a combined market share of 44 per cent. They also have 7.8 per cent of homewares, 5.5 per cent of clothing and footwear and 3.3 per cent of electrical goods. "No single non-food category is off-limits to the rapacious grocers," said Verdict's Richard Hyman, "and the beauty for the grocers is that non-food specialists cannot turn the tables and take them on at their own game because the barriers to entry are prohibitively high."
This leaves supermarkets free to chase the higher profit margins and faster market growth rates then food sales offer. Tesco and Asda have each added more than £1bn a year of non-food sales, while George at Asda is the childrenswear market leader with a 7.1 per cent share.Reuse content