Food, with a bit on the side

By December, we’ll be the eighth-largest photo processing centre in the country,” says one, while another boasts proudly about the development of a pharmacy counter that would have made the mighty Jesse Boot’s eyes smart with envy.

Books, perfumes, health checks, dry cleaning, petrol, cards, gifts, clothes, plants, condoms, magazines and newspapers, stationery, toys, crèches, takeaways.

To look at the feverish diversification of today’s supermarket multiples, you’d be forgiven for thinking that the core reason for their very existence – the mission to provide the masses with good quality groceries at reasonable prices – had practically gone by the board in their bid to rule the world.

Yet as Tesco, Asda, Sainsbury’s, Waitrose and the others play out their peculiar ritual of in turn closely copying, and then frantically distancing themselves from each other, the trend towards the supermarket with something for everyone shows no sign of abating.

For those of us who like the principle of one-stop shopping, this trend can only be a good thing and should be encouraged.

But for shoppers who find it hard to believe that Tesco the food specialist can also, at will, become Tesco the stand-in doctor – dispensing prescriptions with as much alacrity as it distributes frozen peas – such developments are to be viewed with a great deal of suspicion.

But why stop at mere health?

The singles evenings run by a large chain recently were surely a significant step in the inevitable blurring of the distinction between people’s shopping trips and their social lives in general.

I can’t quite see christenings sitting happily with babywear and milk substitutes – noisy babies and supermarkets still don’t quite fit together – but why not exploit the new relaxation in marriage laws by staging the first supermarket wedding?

Can you not picture the white-attired bride walking down the (shopping) aisle to the piped accompaniment of the Carpenters’ “We’ve Only Just Begun?”, with only a few discreet in-store announcements to distinguish the supermarket from a genuine church?

Or the proud groom nervously twiddling his signet ring and bow tie as he waits anxiously to literally “check-out” the woman he has chosen as his shopping partner for life?

And it is all too easy to picture groups of guests arranged tastefully next to paper products – useful for tearful mothers – or wines and spirits (essentials for guests who can’t wait for the knees-up).

With packets of confetti and wedding cards just a stone’s throw away on stationery, plus enough wedding gifts, champagne and wedding cake on the premises to satisfy a latter-day Liz Taylor, why not stage an entire experimental reception in-store?

A supermarket wedding would at least have the advantage of differentiating one store from another – after all, surely the most fuzzy-headed of grooms would remember if he’d tied the knot at Sainsbury’s or the Co-op – and at a time when supermarkets are rapidly losing their basic identity, that alone has got to be a plus point.

The Co-op, of course, has long had a toehold in the highly profitable funerals market. But if your average superstore still seems a rather bizarre place to hatch, match and despatch its loyal customers, then equally strange surely is the development of in-store fitness testing and hi-tech health assessment equipment.

After all, however willing Tesco and Safeway may say they are to act as stand-in doctors and pharmacists, do we really want the ethics of Jack Cohen and his ilk to be brought into something as vital as healthcare?

Well, given that it is supermarkets, not pharmacists, who have the customer base, the money and above all the space to offer hitherto unheard of luxuries such as private consulting rooms, and instant health checks for under a fiver, then I expect the answer to that must be a reluctant “yes”.

The case for diversification into non-food is, of course, a highly persuasive one. According to a recent report by James Capel, the total food and drink market is valued at 55bn, which is interesting given that the total value of related non-food markets such as toiletries, clothing, petrol and music is also 55bn.

The difference is that while the grocery retailers already have a massive 75 per cent share of food and drink sales, their share of the non-food sector is a relatively paltry 11 per cent.

But while it is the margins on these non-food items that are luring the big chains – about 40 per cent on clothes and 30 per cent on magazines and newspapers compared with the standard 23 or 24 per cent on mere groceries – the leap into areas about which the average supermarket director knows precisely nothing, is surely part of a wider battle.

As Verdict Research and others point out, the fact that today’s supermarkets are so similar is a great marketing disadvantage. Not only is there less of a reason for new customers to choose Waitrose over Safeway, for example, when the two look virtually identical in so many ways, there is also less of a reason for the once-loyal Waitrose addict to continue to beat that well-trodden path to its door.

The emphasis is changing subtly as a result. While getting customers remains a major pre-occupation, it is the task of keeping the ones you’ve already got that is taxing many of the finest marketing brains in supermarket land.

One solution is to bombard individuals with as many diverse products and services as you can cram in – meeting more of their needs under one roof than they ever dreamed possible.

In today’s highly competitive environment then, it is as important to keep your existing customer base as to steal from your rivals. And if that means you must become a leading-edge dry-cleaner or pharmacist of local note, then so be it.

While it wouldn’t do the supermarkets any favours to take their eye too far away from the main ball, most commentators believe the diversification route offers plenty more opportunities.

So roll on supermarket-owned financial services – maybe even mortgages would offer a good fit with the values of the superstore. Then there are the realms of property management and, given the successful move into petrol sales, even motorway services. This one will run and run.


    Leave a comment