The Grocer 33 Non-Food Report kicks off this week and will provide a key barometer of performance in a critical area of growth, says Gaelle Walker
Who rules the roost in non-food? Until now, apart from what could be gleaned from company reports, there has been precious little data out there to provide the answer. So we have decided to launch The Grocer 33 Non-Food Report - the first independent analysis of non-food price points.
By extending our industry-renowned shopping basket survey, we will be able to give you a quarterly update on pricing across the big four grocery retailers on 33 key lines from across non-food.
As well as showing how the retailers compete with each other on price, the information will provide an invaluable insight into general pricing trends and the impact of pressures such as deflation and production costs.
We intend it to become as much of a benchmark for the top multiples’ performance in non-food as The Grocer 33 weekly list is for their achievements in the grocery channel. Every three months we will revisit the figures and flag up the retailers with the cheapest, fullest offers.
Prices have been collated by retail and trade research specialist ESA. As Morrisons does not currently stock any comprehensive clothing line it is impossible to provide prices for 33 comparable products at all four major supermarkets. Therefore our list is divided into two sections the first comprising 28 electrical, entertainment, bathroom and kitchen lines at Asda, Morrisons, Tesco and Sainsbury. The second list covers five like-for-like clothing lines stocked at Asda, Tesco and Sainsbury only.
So who’s on top? Our first-ever basket reveals that Tesco and Asda are, with Tesco just ahead of Asda by a nose in terms of the cheapest basket.
In clothing, the roles are reversed, with Asda just pipping Tesco to the post, with products valued at £20.75, versus £22.00. Sainsbury, meanwhile, rings up a substantially heftier bill of £38.40.
Those with the global sourcing ability to buy deep and sell cheap are at the top of the pile, says Gavin Rothwell, analyst at Verdict Research. Asda’s ability to piggyback on Wal-Mart’s global sourcing power enables the retailer to keep slashing prices in areas like clothing. An Asda spokesman agrees: “Wal-Mart buys denim by the mile rather than the yard, so it gets a better price from the suppliers. There are many efficiencies to be had, all of which impact down the rest of the chain.”
In other categories, our survey reveals some surprises. While there’s not much in it in the key area of home entertainment, for example, Morrisons emerges as the cheapest, with goods priced at £90.46, versus Tesco’s £90.64.
In kitchenware, meanwhile, Tesco boasts the cheapest prices, with products totalling £7.65, compared with Asda in second place with £7.91. Morrisons and Sainsbury tie in third place, with goods totalling £12.24.
The figures show Asda stocks the cheapest officeware overall, but again this is offset by Tesco’s claim to the cheapest batch of general electrical items, based on our selection. Sainsbury consistently chalks up the most expensive tallies by category, but that’s no great surprise, considering that until recently, its major focus was food.
Our survey shows one way the supermarkets hook customers with their non-food offer is by singling out key products as examples of ultra-low pricing. For example, Tesco and Morrisons are selling steam irons for £4.94, considerably cheaper than competitors. “They target low prices on to a small number of iconic products. Tactics such as these have a huge impact on impulse pick up,” says Marc Hudson, analyst at PriceWaterhouseCoopers.
Traditionally, the multiples have concentrated on selling a small range of products, at a high volume, the added bonus being that they don’t require a particularly knowledgeable staff to do it, he says.
However, as consumer trust and awareness increases, they are adding more premium lines. “The grocers are now attempting to capture consumer spend from as wide a customer base as possible,” says Verdict’s Rothwell.
If supermarkets broaden their offer as well as providing core products at prices that high street retailers find hard to beat, their future looks rosy. Analysts predict a seismic shift in non-food retailing that will pull consumers away from the traditional high-street operators and into grocers - particularly at a time when the economy is starting to get tight and people are watching what they spend.
However, to progress their non-food offering, the supermarkets need to secure sites that will give them more space, says Hudson. Since 1993, the government’s Planning Policy Guideline 6 has restricted the growth of out-of-town superstores to protect UK town centres. Since these stores are the principal sites for non-food ranges, this has threatened expansion.
The top multiples are finding ways round these restrictions. Asda has added mezzanine floors to existing stores that function as prime sites for its non-food. Other supermarkets are extending stores where possible, or adding marquees and tents devoted to seasonal non-food ranges.
On average, Asda’s stores remain the largest, at more than 4,000 sq m, according to Mintel’s 2005 Non-Food Report.
Tesco’s average store size grew by 8.9% to 2,580 sq m between 2000 and 2004 and Sainsbury’s average store size grew by 5.8% to 2,918 sq m.
Despite the challenge, Hudson predicts the non-food sector will grow at double-digit rates. Mintel, meanwhile, optimistically predicts the sector will rise from £8.8bn this year to £14.9bn by 2010.
And as it grows, The Grocer 33 Non-Food Report will be tracking price - one of the key measures of how the major multiples are competing. The Grocer 33 non-food pricing survey
>>the industry’s new barometer of non-food pricing in multiple grocers (£)
productsAsdaMorrisonstescosainsbury
Cheapest bath towel2.324.996.007.99
Cheapest hand towel0.742.993.003.99
Cheapest duvet - double8.749.999.009.99
Cheapest duvet cover - double6.479.997.005.99
Cheapest microwave24.4729.9924.4734.99
Cheapest stainless steel kettle15.6714.9914.9714.99
Cheapest steam iron13.474.944.9414.99
Cheapest toaster (2-slice)5.677.995.675.99
Cheapest standard umbrella3.972.995.004.99
Lightbulbs 2pk (40w-60w)0.440.450.800.45
Cheapest own-label A4 refill pad0.360.490.740.99
Cheapest own-label lever arch file0.761.490.760.99
Cheapest own-label ringbinder0.370.790.370.49
Printer paper 500 sheets1.951.991.944.49
Cheapest roasting tin (inc turkey tin)0.880.890.680.99
Cheapest wooden spoon0.260.390.260.99
Measuring jugs0.440.490.440.79
Pizza cutter0.500.990.441.99
Saucepan (16cm)2.365.992.363.49
Vacuum flask (1-litre)3.473.493.473.99
Top of chart CD album9.779.779.779.79
Top of chart DVD14.8412.9912.9711.99
Top of chart paperback3.734.993.734.99
Top of chart PS2 game 29.9729.9932.9729.99
Blank CDR - 10pk3.973.992.773.99
Cheapest batteries 4pk x AA size0.720.790.721.87
Cheapest DVD player24.7424.9924.7424.99
Cheapest single-use camera2.972.952.974.99
Total (exc. Clothing)184.02196.77182.95216.16
Morrisons does not stock a comprehensive clothing line so is not included in the five clothing lines stocked by Asda, Tesco and Sainsbury that are compared below
Cheapest men’s jeans3.00NS4.0010.00
Cheapest T-shirt4.00NS2.002.40
Cheapest black trousers8.00NS6.006.00
Cheapest women’s jeans3.00NS3.0010.00
Cheapest white blouse2.75NS7.0010.00
clothing Total20.75NS22.0038.40
Overall Total204.77NS204.95254.56
The Grocer 33 Non-Food Report is a quarterly survey designed to reflect the prices of key non-food lines in the big four supermarket chains. The survey uses a basket of commonly bought non-food products. Shelf-edge prices are collected by retail and trade research specialists ESA via store audits.
Who rules the roost in non-food? Until now, apart from what could be gleaned from company reports, there has been precious little data out there to provide the answer. So we have decided to launch The Grocer 33 Non-Food Report - the first independent analysis of non-food price points.
By extending our industry-renowned shopping basket survey, we will be able to give you a quarterly update on pricing across the big four grocery retailers on 33 key lines from across non-food.
As well as showing how the retailers compete with each other on price, the information will provide an invaluable insight into general pricing trends and the impact of pressures such as deflation and production costs.
We intend it to become as much of a benchmark for the top multiples’ performance in non-food as The Grocer 33 weekly list is for their achievements in the grocery channel. Every three months we will revisit the figures and flag up the retailers with the cheapest, fullest offers.
Prices have been collated by retail and trade research specialist ESA. As Morrisons does not currently stock any comprehensive clothing line it is impossible to provide prices for 33 comparable products at all four major supermarkets. Therefore our list is divided into two sections the first comprising 28 electrical, entertainment, bathroom and kitchen lines at Asda, Morrisons, Tesco and Sainsbury. The second list covers five like-for-like clothing lines stocked at Asda, Tesco and Sainsbury only.
So who’s on top? Our first-ever basket reveals that Tesco and Asda are, with Tesco just ahead of Asda by a nose in terms of the cheapest basket.
In clothing, the roles are reversed, with Asda just pipping Tesco to the post, with products valued at £20.75, versus £22.00. Sainsbury, meanwhile, rings up a substantially heftier bill of £38.40.
Those with the global sourcing ability to buy deep and sell cheap are at the top of the pile, says Gavin Rothwell, analyst at Verdict Research. Asda’s ability to piggyback on Wal-Mart’s global sourcing power enables the retailer to keep slashing prices in areas like clothing. An Asda spokesman agrees: “Wal-Mart buys denim by the mile rather than the yard, so it gets a better price from the suppliers. There are many efficiencies to be had, all of which impact down the rest of the chain.”
In other categories, our survey reveals some surprises. While there’s not much in it in the key area of home entertainment, for example, Morrisons emerges as the cheapest, with goods priced at £90.46, versus Tesco’s £90.64.
In kitchenware, meanwhile, Tesco boasts the cheapest prices, with products totalling £7.65, compared with Asda in second place with £7.91. Morrisons and Sainsbury tie in third place, with goods totalling £12.24.
The figures show Asda stocks the cheapest officeware overall, but again this is offset by Tesco’s claim to the cheapest batch of general electrical items, based on our selection. Sainsbury consistently chalks up the most expensive tallies by category, but that’s no great surprise, considering that until recently, its major focus was food.
Our survey shows one way the supermarkets hook customers with their non-food offer is by singling out key products as examples of ultra-low pricing. For example, Tesco and Morrisons are selling steam irons for £4.94, considerably cheaper than competitors. “They target low prices on to a small number of iconic products. Tactics such as these have a huge impact on impulse pick up,” says Marc Hudson, analyst at PriceWaterhouseCoopers.
Traditionally, the multiples have concentrated on selling a small range of products, at a high volume, the added bonus being that they don’t require a particularly knowledgeable staff to do it, he says.
However, as consumer trust and awareness increases, they are adding more premium lines. “The grocers are now attempting to capture consumer spend from as wide a customer base as possible,” says Verdict’s Rothwell.
If supermarkets broaden their offer as well as providing core products at prices that high street retailers find hard to beat, their future looks rosy. Analysts predict a seismic shift in non-food retailing that will pull consumers away from the traditional high-street operators and into grocers - particularly at a time when the economy is starting to get tight and people are watching what they spend.
However, to progress their non-food offering, the supermarkets need to secure sites that will give them more space, says Hudson. Since 1993, the government’s Planning Policy Guideline 6 has restricted the growth of out-of-town superstores to protect UK town centres. Since these stores are the principal sites for non-food ranges, this has threatened expansion.
The top multiples are finding ways round these restrictions. Asda has added mezzanine floors to existing stores that function as prime sites for its non-food. Other supermarkets are extending stores where possible, or adding marquees and tents devoted to seasonal non-food ranges.
On average, Asda’s stores remain the largest, at more than 4,000 sq m, according to Mintel’s 2005 Non-Food Report.
Tesco’s average store size grew by 8.9% to 2,580 sq m between 2000 and 2004 and Sainsbury’s average store size grew by 5.8% to 2,918 sq m.
Despite the challenge, Hudson predicts the non-food sector will grow at double-digit rates. Mintel, meanwhile, optimistically predicts the sector will rise from £8.8bn this year to £14.9bn by 2010.
And as it grows, The Grocer 33 Non-Food Report will be tracking price - one of the key measures of how the major multiples are competing. The Grocer 33 non-food pricing survey
>>the industry’s new barometer of non-food pricing in multiple grocers (£)
productsAsdaMorrisonstescosainsbury
Cheapest bath towel2.324.996.007.99
Cheapest hand towel0.742.993.003.99
Cheapest duvet - double8.749.999.009.99
Cheapest duvet cover - double6.479.997.005.99
Cheapest microwave24.4729.9924.4734.99
Cheapest stainless steel kettle15.6714.9914.9714.99
Cheapest steam iron13.474.944.9414.99
Cheapest toaster (2-slice)5.677.995.675.99
Cheapest standard umbrella3.972.995.004.99
Lightbulbs 2pk (40w-60w)0.440.450.800.45
Cheapest own-label A4 refill pad0.360.490.740.99
Cheapest own-label lever arch file0.761.490.760.99
Cheapest own-label ringbinder0.370.790.370.49
Printer paper 500 sheets1.951.991.944.49
Cheapest roasting tin (inc turkey tin)0.880.890.680.99
Cheapest wooden spoon0.260.390.260.99
Measuring jugs0.440.490.440.79
Pizza cutter0.500.990.441.99
Saucepan (16cm)2.365.992.363.49
Vacuum flask (1-litre)3.473.493.473.99
Top of chart CD album9.779.779.779.79
Top of chart DVD14.8412.9912.9711.99
Top of chart paperback3.734.993.734.99
Top of chart PS2 game 29.9729.9932.9729.99
Blank CDR - 10pk3.973.992.773.99
Cheapest batteries 4pk x AA size0.720.790.721.87
Cheapest DVD player24.7424.9924.7424.99
Cheapest single-use camera2.972.952.974.99
Total (exc. Clothing)184.02196.77182.95216.16
Morrisons does not stock a comprehensive clothing line so is not included in the five clothing lines stocked by Asda, Tesco and Sainsbury that are compared below
Cheapest men’s jeans3.00NS4.0010.00
Cheapest T-shirt4.00NS2.002.40
Cheapest black trousers8.00NS6.006.00
Cheapest women’s jeans3.00NS3.0010.00
Cheapest white blouse2.75NS7.0010.00
clothing Total20.75NS22.0038.40
Overall Total204.77NS204.95254.56
The Grocer 33 Non-Food Report is a quarterly survey designed to reflect the prices of key non-food lines in the big four supermarket chains. The survey uses a basket of commonly bought non-food products. Shelf-edge prices are collected by retail and trade research specialists ESA via store audits.
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