Tesco toy offer set to focus on pocket money lines

Tesco is expected to focus more on lower-priced items

Tesco is expected to sharpen its focus on lower-priced toys as it reduces the space it gives general merchandise in stores.

Tesco CEO Philip Clarke has said the retailer is “managing down” general merchandise “to categories customers say make sense to them when shopping for everyday needs”.

While the retailer told The Grocer it would “continue to offer a great range of toys”, experts predicted it would shift some higher-priced lines to Tesco Direct as it cut back parts of its non-food offer including electronics, DIY and toys.

Outside the Christmas period, Tesco was likely to focus more on sub-£10 pocket-money toys and items suitable for birthday party presents, suggested some observers.

“There is a lot of risk in high-profile, low-margin products,” said one, while another predicted Tesco would cherrypick key SKUs from ranges.

Some big-ticket items - such as LeapPad and Furby - would continue to be stocked in-store, predicted consultant Steve Reece. Rivals might see Tesco’s refocus as an opportunity to expand their offer, he added.

However, Alan Simpson, chairman of specialist retailers’ trade body the Toy Retailers Association, said he hoped other grocers would follow Tesco’s lead. “Their presence, first picking off top lines for Christmas and more recently stocking a few all year, has been pushed even further by some developing own-label lines. These trends have damaged margins.”

Tesco is also expected to take a more seasonal approach, increasing space in Q4. “The mistake it has made is in trying to give toys the same footage all-year round,” said Ian Edmunds, operations director at retail group Toymaster.

Data from analysts NPD showed grocers failed to grow their 20.5% overall share of the toy market last year.