Sainsbury's to strengthen its non-food business

Sainsbury’s has announced plans to free up 6% of its shop space for non-food retailing.

The supermarket chain has identified 1.5 million ft2 of space across the UK that no longer needs space for food items, CFO John Rogers said at an event in London yesterday.

The group intends to use half the space for selling its own brand of non-food items, including clothing. For the remaining half, Sainsbury’s is in talks with other retailers about subletting space.

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The news comes as discounters including Aldi and Lidl put pressure on the ‘Big Four’ supermarkets – Tesco, Morrisons, Sainsbury’s and Asda to close stores, scrap expansion plans and reduce prices.

Sainsbury’s reported a 0.3% in total retail sales for the fourth quarter in March, but clothing and general merchandise sales were up more than 6% on last year. 

Heiner Evanschitzky, professor and chair of Marketing at Aston Business School said all big names need to think about using their space differently.

“From letting it to others to selling non-food items, supermarkets have to focus on their core strengths: customer service and convenience. Building ‘shops within a shop’ for customers to get what they need, when they need it, in one place is the answer to today’s grab and go shopping culture.

“The Big Four have to realise that they can’t beat the discounters on price. My advice to them is: stop building megastores, use your existing space to open up to complementary retailers. If you want to survive in today’s cut-throat retail environment, you’re going to have to collaborate and get creative.”

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