Its latest report predicted that Tesco would take 3.6% of the non food market this year against 3.2% last year.
This would see it overtake Argos, which has 3.5%.
Last year Tesco launched a standalone non food format called Home Plus and there are also reports that it is planning to launch a home shopping catalogue later this year.
Alastair Lockhart, author of the report, said: “Tesco is set to overtake Argos this year to become the UK's largest non food retailer and is certain to extend its lead going forward.”
He added: “It is skilfully enhancing its ranges across all categories and leading the way in internet and in-store catalogues to create new opportunities.”