UK Supermarkets Increase Stake In Non-Food Items

Tue, 31 Jul 2007
 
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British supermarkets are taking in more than one pound in every £10 spent on non-food items in the UK, new research as revealed.

Market analysts Verdict expect non food sales at major grocery retailers to increase by more than one-third by 2011, as plans to increase space and expand their online and catalogue offers continue to gather speed. Sales of non-food items at UK supermarkets, which were worth £17.5bn last year, are expected to rise by 34.4 per cent during the next five years to £23.6bn in 2011.

Nick Gladding, senior retail analyst at Verdict, said "Alongside the growth of online retailing, the expansion of grocers into non-food is set to be the most fundamental challenge facing traditional UK retailers over the next five years."

"Retailers like HMV, WH Smith and Woolworths, who have already felt the impact of grocers’ expansion into non-food, look likely to be jointed by many more players from sectors as diverse as electricals, DIY and furniture," he added.

Although the UK’s top two supermarket groups, Tesco and Asda, continue to lead the assault on non-food, both Sainsbury’s and Morrisons are set to ramp up their non-food space over the next five year period, according to Verdict.

The analysts added that multichannel formats such as Tesco Direct are likely to provide the vehicle for longer-term non-food development among leading grocers, although customer service is likely to be the key weakness for grocers.

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