INTELLIGENT COMMENT AND INSIGHT INTO THE LATEST GLOBAL INDUSTRY MARKET TRENDS

march

19th

by Neil Saunders

UK: Customers Choose Asda and Tesco Over Big High Street Names such as H&M and Gap

More people than ever before in the UK, are shopping at supermarkets for items other than food, a new report reveals. Over 62% of all shoppers regularly use supermarkets to buy non-food items, collectively spending over £19.7bn. These numbers have risen sharply compared to five years back when just 45% used grocers for non-food, collectively spending £13.3bn.

On a sector level supermarket dominance is no less impressive. A fifth of UK consumers regularly buy clothing, homewares and music and video at grocers, while just under half of consumers use the grocers for personal care products.

As an example of their dominance, in terms of regular customer share, Asda is the UK’s fifth largest clothing retailer while Tesco is the ninth; both players now have more regular clothing customers than well established chains like Bhs, Gap and H&M. Meanwhile, in personal care, all of the big four grocers (Tesco, Sainsbury’s, Asda and Morrisons) have larger market shares than health and beauty specialist Superdrug.

“What the grocers offer is convenience with very competitive prices”, says Neil Saunders, Verdict’s Director of Consulting. “For the time pressed, cost conscious consumer it is a great advantage to be able to pick up good priced clothing or electrical items at the same time as doing a food shop.”

But, the research stresses, the grocers’ success in non-food is much more than just opportunistic selling. While there may be an element of opportunism, what most supermarkets are doing is much more advanced: many actively understand what their consumers want and tailor their offers accordingly. In some cases, they even attempt to lead and create fashion trends, especially in clothing.

“Today’s supermarkets are no longer simple grocers,” says Neil Saunders. “They are cathedrals of consumption, the department stores of the modern age. We expect them to build on this position over the next few years and that will certainly make life difficult for other specialist players.”

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