Tesco is set to overtake Argos and Homebase owner ARG as the UK’s number one non-food retailer and will take &£1 in every &£28 spent in the sector by the end of the year.
The prediction comes in a report from retail analyst Verdict Research, which forecasts that Tesco will take a 3.6% share of the UK non-food market, estimated to be worth &£170bn, by December,. That would outstrip ARG, which will have 3.5% share. The figures for 2005 show ARG claiming a 3.3% share against Tesco’s 3.2%.
Last year, Tesco opened its first non-food only Homeplus store in Manchester, and its non-food offer will be boosted this autumn by the launch of a catalogue and online business, which is expected to be called Tesco Direct.
Alastair Lockhart, senior retail analyst at Verdict, says: “Tesco’s catalogue is likely to make an impact in areas like furniture, which it hasn’t focused on before.
“Argos isn’t doing anything wrong. In fact, it’s going from strength to strength, increasing the size of its catalogue and ranges, and doing all it can. But Tesco has such a big platform for growth with both the catalogue and Tesco.com.”
Analysts believe Tesco Direct will be backed in store by the addition of non-food mezzanine areas in its Extra outlets to make it easier for customers to order items (MW March 30).
Verdict claims that while total UK consumer spend on non-food items rose by just 0.9% in 2005, sales among grocers grew from 8.5% to 9.1%. It forecasts grocers will take &£1 in every &£10 spent on non-food by 2007.
No one at Tesco or Argos was available to comment on the report as Marketing Week went to press.
Separately, Tesco is offering consumers Clubcard loyalty points in return for using old carrier bags rather than taking new ones. It has also pledged to open UK stores only in communities where they are welcomed by a majority of residents. Tesco and other major supermarkets face a Competition Commission probe into their dominance of the UK grocery sector.