Tesco's dominance growsSupermarket to become biggest non-food store

10 August 2006

 

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Supermarket giant Tesco looks set to become the UK's number one non-food retailer, a new report predicts.

Tesco is already the UK's biggest grocery retailer, way ahead of rivals Asda and Sainsbury's. Now the chain's expansion  into clothing, electricals, entertainment and homeware has boosted its share of the £168 billion non-food sector.

Market analyst Verdict says Tesco is set to knock the Argos Retail Group - the company behind Argos and Homebase - from of the top non-food retail slot later this year. Non-food includes everything but groceries.

Tesco Extra stores

Report author Alistair Lockhart said Tesco's huge customer base had helped its expansion into non-food.

He added:‘Tesco continues to add substantial new non-food space through mezzanines, store extensions and new store builds. It’s skillfully enhancing its ranges across all categories; and leading the way in internet and in-store catalogues to create new opportunities.

‘As Tesco opens more of its largest Extra stores over the next few years, we can expect to see a lot more clothing, homewares and electrical goods in Tesco’s stores.  Ranges will be broader, and the way product is displayed will improve.’

Tesco to 'beat Argos'

Verdict predicts that Tesco will take a 3.6 per cent slice of the non-food market this year - up from 3.2 per cent last year. This will put it ahead of the Argos Retail Group's 3.5 per cent.

Mr Lockhart said the big players still had relatively small percentages of the non-food sector because the market was so fragmented.

Verdict says supermarkets are storming the non-food market and by  2007 one in £10 spent on all non-food products will be spent in supermarkets. It predicts that the increased competition from supermarkets will result in other businesses going bust.