Although the end of the summer holidays signalled a depressing return to school this week for many children, it has brought a smile to the faces of supermarket executives who have used the opportunity to drive up non-food sales.
The total back-to-school market is estimated to be worth £1bn and, with their strong focus on clothing, it is the school uniforms’ market that the supermarkets have strongly targeted. Uniform sales alone, during the key eight-week summer period, are worth a total of around £200m.
Early evidence shows that supermarkets have enjoyed a bumper back-to-school season that has beaten all previous years.
Richard Jones, business unit director for clothing at Sainsbury, which launched its TU-branded school kit in July for children aged from three to 13 years, says: “Back to school is a great opportunity for Sainsbury. We planned to be 100 per cent up on last year and will be looking to drive this harder again next year.”
Referring specifically to the ‘Back TU School’ uniforms, Jones says they have been available in more than 400 stores (compared with last year when the company stocked Adams school uniforms, and these were available in only 120 stores) and that sales were nine per cent above target.
Even though the TU range is 30% cheaper than last year’s offer, Sainsbury has still been running a ‘25% off’ promotion for the key trading period from the end of July to the middle of this month.
Such deep price cuts are essential if it is to compete with Tesco’s aggressive pricing position, which has resulted in its Value uniform range selling at 49% less than in 2004. This heavy discounting is evidence that, just as with food, the supermarkets are focusing more heavily on price.
Sally Bain, retail consultant at The Chambers, says this is affecting the wider retail market by pushing the competition on the high street down the price-driven route.
“Over the past two to three years the supermarkets have upped their game in schoolwear, specifically at the lower price points. This has definitely had an impact on the likes of M&S, who used to trade on quality but are now competing more on price. It’s much more crowded in this part of the market,” she says.
Back to school has also been far more heavily promoted this year by the supermarkets, which have used much more TV advertising than in the past. Asda is among those promoting its offer aggressively through TV and other media.
Deborah Smith, general manager for George childrenswear, would not disclose any sales figures but says the company’s product range - which includes uniforms, sportswear and footwear - has been promoted through a TV campaign, press advertising in national newspapers, Asda’s own magazine and in-store point-of-sale.
Tesco has also undertaken a national advertising campaign, which has involved distributing a back-to-school brochure to four million homes.
It believes that this year will be one of its most successful campaigns and predicts that its schoolwear sales will be up almost 30% on last year.
There’s no doubting how important this period is becoming for the supermarkets. Jason Tarry, clothing director for Tesco, says: “Back to school has become more and more important for us. As a season, only Christmas and Easter are bigger.”
Although clothing is the key category in the back-to-school sales fight (it represents 75% of Sainsbury’s back-to-school offer), the other categories such as stationery, lunchboxes and computers still represent a decent chunk of sales that are worth battling it out for.
Tesco has certainly been in there fighting and has forecast that its stationery sales will have increased 33% on last year.
It was also confident of enjoying strong sales of PCs and laptops as it says it now sells twice as many units during August and September than during the Christmas trading period.
Although it is does not have a clothing offer, Morrisons still regards the back-to-school period as an important generator of business and so it has concentrated all its efforts on pushing up volumes of its stationery lines.
Nick Trestrail, senior buyer at Morrisons, says: “It is essential that we continue to meet the demands of all our customers within this non-food category.
“Our back-to-school promotion is aimed at both school and university students, totalling more than 70 different products that have been specifically chosen to cater for a student’s every need.”
The pricing strategy of these lines fits in with that adopted by Morrisons for its core food offer, with a variety of offers available including multi-saves and buy-one-get-one-free offers.
Trestrail says: “The back-to-school range reinforces the quality and value message that is at the heart of our offer.”
While Morrisons lacks an online operation, the other supermarkets continue to grow their internet sales.
However, since they still do not sell clothing over the internet they have gained very little mileage out of their online businesses during this year’s back-to-school period. This undoubtedly will provide them with an opportunity next summer.
All to play for in back-to-school tug o’war
>>Asda offer beats tesco hands down in the minds of consumers
In the back-to-school tug of war, Asda has beaten Tesco hands down as far as shoppers are concerned.
More than twice as many shoppers who bought back-to-school items this year think Asda had a better offer than Tesco, according to a consumer survey carried out online exclusively for The Grocer by Harris Interactive.
Surprisingly, this includes 38% of those who do the bulk of their shopping at Tesco and 40% of those who do theirs at Sainsbury. Asda shoppers, however, remained loyal to the cause, only 4% stating a preference for Tesco.
Caroline North, senior marketing researcher at Harris Interactive, believes that the findings will present Asda with vital ammunition in its battle with Tesco. “It is interesting that so many of Tesco’s main grocery shoppers say that Asda’s George is the best. If they are making the effort to go to Asda to get school uniforms, how much of a switch is it to think about other items. It’s an open door for people to swap allegiances.”
However, she points out, although Tesco will be disappointed, the real loser was Sainsbury, scoring a paltry 1%.
“The survey shows there’s a gap in the marketing mix,” says North. “The offer hasn’t clicked in the mind of the consumer. Only 6% of main Sainsbury shoppers said Sainsbury was the best.” Nevertheless, there is still all to play for, the survey suggests. This year 41% of shoppers bought most of their back-to-school items from supermarkets, while 38% bought from high street chains and 7% from department stores. Most spent under £100 per child.
North says: “The supermarkets have really cornered the market. They are able to offer consumers a one-stop shop and are seen as delivering real value for money - which is one of the key priorities for shoppers.”
However, there is no room for complacency, she warns. While price appears to be the overriding factor behind the supermarkets’ dominance, only 29% think they offer the best quality.
Which supemarket do you think offers the best back-to-school range? (%)
Which of the following do you normally buy most back-to-school items from? (%)
High street chain38
Specialist uniform shop12
Which do you think offers the best value for money on back-to-school items? (%)
High street chain30
Specialist uniform shop1
Which do you think offers the best quality for back-to-school items? (%)
High street chain28
Specialist uniform shop18
On average how much do you normally spend per child on back-to-school items? (%)
Less than £2510
£25 to £4925
£50 to £7423
£75 to £9921
£100 to £1249
£125 to £1495
£150 to £1744
£175 to £1991
£200 or more2
This year, have you found yourself using supermarkets for back-to-school items more, less or the same as last year? (%)
Didn’t buy last year9