The multiple grocery chains have carried non-food basics, such as toiletries, disposable paper products and cleaning items, since first opening in the 1950s
April 13, 2007 (Press Release) --
Non-Food Sales in Supermarkets Market Assessment 2006
Executive Summary
The multiple grocery chains have carried non-food basics, such as toiletries, disposable paper products and cleaning items, since first opening in the 1950s. However, the move to larger, out-of-town sites in the 1980s gave many supermarkets the additional space required for extending their non-food offering — with ASDA, in particular, focusing on non-food, not least because its stores are generally much bigger than those of its competitors. Profit margins on non-food items are higher than on food products, and the non-food offering is a method of differentiating one chain from another in a way that is not always possible with food products. Some of the non-food brands, such as ASDA's George clothing brand, have been phenomenally successful. In ASDA's case, this has helped the chain's clothing sales to outstrip those of Marks & Spencer. Buying in bulk, supermarkets can squeeze suppliers' prices and sell discounted goods. They can also `cherry pick' lines, taking advantage of the time and investment that manufacturers and specialist traders have put into knowing their markets and varying products on offer according to the season. The development of online shopping facilities has also enabled the likes of Tesco to deliver items such as large electrical appliances, music, books and gardening equipment direct from manufacturers and warehouses. In addition to selling non-food items, the supermarkets are also selling services and utilities, capitalising on their trusted brands, and forging partnerships with other companies.
It is somewhat ironic that accusations of dubious farming practices, excessive `food miles' and squeezing suppliers on price have convinced many people to shop for food from local specialists and farmers' markets, yet these same supermarkets are increasing their share of non-food retail markets such as clothing and health and beauty. In fact, so successful have they been in encroaching on specialists' markets that they are coming into considerable criticism. An All-Party Parliamentary Group for Small Shops has said that independent grocers, newsagents and off-licences will not survive the ruthless discounting from Tesco, ASDA and the other big chains. The report (High Street Britain 2015) was published in February 2006 as the Office of Fair Trading (OFT) considered whether to refer the UK's supermarkets to the Competition Commission for a full-scale investigation. The report warns that, by 2015, Britain could be covered with `clone towns', with large retailers lining high streets and high streets in some areas becoming totally devoid of shops. The Group points out that such a demise will have a potentially devastating effect on the health of the population's lowest earners and the elderly. The report also voices the suspicion that the grocery multiples will put their prices up once the independents have been eradicated from the high street. Predictably, Tesco disagreed with the All-Party Parliamentary Group's view that small shops were in terminal decline, saying that people used supermarkets and small shops at different times. The Government has dismissed calls for the appointment of a retail regulator
Executive Summary
The multiple grocery chains have carried non-food basics, such as toiletries, disposable paper products and cleaning items, since first opening in the 1950s. However, the move to larger, out-of-town sites in the 1980s gave many supermarkets the additional space required for extending their non-food offering — with ASDA, in particular, focusing on non-food, not least because its stores are generally much bigger than those of its competitors. Profit margins on non-food items are higher than on food products, and the non-food offering is a method of differentiating one chain from another in a way that is not always possible with food products. Some of the non-food brands, such as ASDA's George clothing brand, have been phenomenally successful. In ASDA's case, this has helped the chain's clothing sales to outstrip those of Marks & Spencer. Buying in bulk, supermarkets can squeeze suppliers' prices and sell discounted goods. They can also `cherry pick' lines, taking advantage of the time and investment that manufacturers and specialist traders have put into knowing their markets and varying products on offer according to the season. The development of online shopping facilities has also enabled the likes of Tesco to deliver items such as large electrical appliances, music, books and gardening equipment direct from manufacturers and warehouses. In addition to selling non-food items, the supermarkets are also selling services and utilities, capitalising on their trusted brands, and forging partnerships with other companies.
It is somewhat ironic that accusations of dubious farming practices, excessive `food miles' and squeezing suppliers on price have convinced many people to shop for food from local specialists and farmers' markets, yet these same supermarkets are increasing their share of non-food retail markets such as clothing and health and beauty. In fact, so successful have they been in encroaching on specialists' markets that they are coming into considerable criticism. An All-Party Parliamentary Group for Small Shops has said that independent grocers, newsagents and off-licences will not survive the ruthless discounting from Tesco, ASDA and the other big chains. The report (High Street Britain 2015) was published in February 2006 as the Office of Fair Trading (OFT) considered whether to refer the UK's supermarkets to the Competition Commission for a full-scale investigation. The report warns that, by 2015, Britain could be covered with `clone towns', with large retailers lining high streets and high streets in some areas becoming totally devoid of shops. The Group points out that such a demise will have a potentially devastating effect on the health of the population's lowest earners and the elderly. The report also voices the suspicion that the grocery multiples will put their prices up once the independents have been eradicated from the high street. Predictably, Tesco disagreed with the All-Party Parliamentary Group's view that small shops were in terminal decline, saying that people used supermarkets and small shops at different times. The Government has dismissed calls for the appointment of a retail regulator
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