LONDON - Tesco is pulling away from the retail pack when it comes to selling nonfood in the U.K., according to a major research study.
In particular, Tesco, based in Cheshunt, England, has made significant gains on Wal-Mart-owned Asda, Leeds, England, in the last few years in most nonfood categories, according to "How Britain Shops," a survey of 6,000 shoppers by Verdict Research, which is part of the Datamonitor Group here.
The study, which measures frequency of visits among retailers' core customers, indicated that Tesco is the second most used retailer for personal care categories, and is now in third place for housewares and home entertainment products. Meanwhile, it has greatly improved its position in apparel in the last year.
While Asda has not gained ground in categories covered by the study, it remains the most used store for housewares and the second most visited store for home entertainment, while continuing as a major destination for apparel.
"Demand for nonfood is growing much more rapidly than food. The Tesco and Asda brands are widely seen as offering good value for money so it makes sense for these retailers to leverage them in areas beyond food," said Nick Gladding, senior retail analyst, Verdict Research and author of the report.
"Nonfood also creates a point of difference from competitors which helps supermarkets that sell it attract new customers," he said.
The report ranks Tesco as the number one source of food in the U.K. As the third most used retailer in the housewares market and the home entertainment market, it is up from seventh and fourth, respectively.
Tesco has also moved from the 14th most used retail store for clothing in 2005 to the ninth in 2006. To do so, Tesco increased the number of stores that stock its clothing offerings and has boosted promotion of its Value, Florence & Fred and Cherokee lines.
"In terms of cash sales gains and good margins, clothing stands out as a very attractive category, since it is the largest of all nonfood markets and small increases in market share translate into significant gains in revenue," Gladding said.
Through its popular clothing line, George, Asda stands behind only Marks & Spencer and clothing and housewares retailer, Next, the report said.
"Clothing ranges need substantial investment in designers, sub-branding and advertising to make them successful," Gladding said.
In housewares, Asda has gone from seventh to first in the past four years. Verdict expects Asda's lead in this market to increase as the retailer adopts the George brand for an extended range of housewares products.
Tesco's position in housewares is also expected to improve as it uses Internet presence and the possibility of a branded catalog that will offer a wider range of product than what is carried in stores.
"The key to nonfood is targeting fast-growth categories and categories that don't require specialist knowledge and service to sell," Gladding said.