Tesco 'to become UK's largest non-food retailer'

17-08-2006

Tesco is to overtake its rivals to become the UK's largest non-food retailer by the end of the year, according to a new report.

The supermarket giant, which already claims the largest share of the country's grocery market, will leap ahead of the Argos Retail Group (ARG) to conquer Britain's non-food retail market, claims Verdict Research.

The research group predicts that Tesco's share of the non-food market will have increased from its current level of 3.2 per cent to 3.6 per cent by the end of 2006. Meanwhile, it forecasts that ARG, owner of the Argos and Homebase chains, will see its share increase from 3.3 per cent to 3.5 per cent.

Tesco, which stocks everything from furniture to electrical goods in its largest stores, is planning to open more of its Extra hypermarkets over the next few years.

Verdict senior retail analyst Alastair Lockhart said the retailer was taking advantage of growing floor space in new stores and the increasing popularity of internet sales to boost its share of the non-food retail market.

"Tesco continues to add substantial new non-food space through mezzanines, store extensions and new store builds," said Mr Lockhart, author of the Verdict report.

"It is skilfully enhancing its ranges across all categories and leading the way in internet and instore catalogues to create new opportunities," he added.

Verdict claims that specialist retailers will increasingly feel the pressure as grocers such as Tesco move into the non-food market.

The group's report says that while overall consumer spending on non-food products increased by just 0.9 per cent last year, grocers increased their non-food sales by 8.4 per cent, boosting their share of the market from 8.5 per cent to 9.1 per cent.

By 2007, Verdict predicts that grocers will account for £1 of every £10 spent on non-food items in the UK.

"As grocers expand their non-food offers, the competition will feel pressure like never before" said Mr Lockhart.

"Whereas, in the past, grocers have typically taken a fairly opportunistic approach in their non-food development, they are now placed to take on specialist retailers head-to-head," he added.

Last week, the UK's third-largest electrical retailer Powerhouse became the latest specialist retailer to go into administration, blaming competition from internet and high street rivals for its collapse.


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