Sir Philip Green's BHS is to open convenience food outlets in up to 150 of his BHS stores as the billionaire retailer eyes a fresh battle for customers with the supermarket chains and Marks & Spencer.
It comes on the same day as Asda, the UK's third-biggest supermarket, said it also wanted to expand into convenience stores for the first time after refusing for years to follow its rivals Tesco, Sainsbury's and Morrisons.
Topshop's owner Sir Philip said he has already seen a prototype of what the food offering could look like and explained it would be run by BHS rather than introducing a third-party business. It could be rolled out as soon as early next year.
The plan could mark a major change of direction for BHS, which has been under pressure in recent years from high-end rivals including Debenhams and John Lewis and discounter Primark. It has also been the subject of a possible takeover by the South African billionaire Christo Weise.
Sir Philip's comments came as he revealed sales across his Arcadia business, which includes Topshop, Dorothy Perkins and Miss Selfridge, were up to £2.7bn last year from £2.6bn, with underlying, pre-tax profits up slightly to £167m. Like-for-like sales were down 2.7 per cent.
He said: "We have 150 stores that can sell food. We've never sold food before and the great thing is if we get it wrong we can always eat it ourselves.
"Convenience is where all the supermarkets seem to be going. We've got the sites so we might as well have a shot at it." He said it was too early to say how much the project would cost or who the target market would be, but added that a new food boss would be required.
"If we're going to do it then we will want someone world class."
Meanwhile at Asda, the chief executive, Andy Clarke, said the company was starting a five year transformation plan, which will see £1bn spent on keeping its prices lower – usually by selling some key items at a loss – and a further £250m on rebranding and improving its offer.
He was particularly keen to moving into health and wellbeing also he said more details would be revealed next year.
Part of his plans is to introduce convenience stores, but not until at least 2018.
He said: "It was not necessarily a eureka moment and we've been very clear that we will be focusing on our core businesses of super stores, super centres and supermarkets first, but recognise a £36bn market that Asda isn't in, in physical space, is a market we should consider and explore and find a solution."
However, Mr Clarke was cautious about the price points, stressing he was keen to maintain the same prices in his supermarkets and in the potential convenience stores – unlike rivals who charge more in high street sites.
The decision to expand into convenience stores comes as Asda revealed like-for-like sales were up 0.3 per cent in the 13 weeks to beginning of October, its 12th consecutive quarter of growth.
Online sales topped £1bn for the first time and Clarke said he hopes to improve this by hitting £3bn by 2018 with 1,000 click and collect points across the country.
Retail reverse: Surprise fall in sales
Shoppers waited before stocking up the winter wardrobe last month and triggered a surprise decline in retail sales, official figures showed.
A mild and wet October sent retail sales volumes including petrol down a surprise 0.7 per cent, confounding expectations for flat month-on-month sales. The ONS showed the biggest decline in clothing stores – down 2.8 per cent in October – but household goods and department stores also suffered falls.