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Non-food in the UK | Verdict Sector Report

  • July 2015
  • -
  • Verdict Retail
  • -
  • 108 pages

Summary
Grocery retailers will outperform the wider non-food market over the next five years. Health and beauty will continue to dominate, while in a reflection of the wider market, music and video will be decimated by digital delivery and online content. The grocers are becoming more competitive in non-food with larger ranges and improved services making them a real threat to the specialists.

Key Findings
- Discover which non-food sectors provide the most growth in grocers over the coming five years, enabling you to effectively plan your non-food strategy

- Understand how the grocers are improving their use of space in store and identify opportunities to further improve your performance

- Benchmark your performance against the Big Four grocers and the remainder of the market by non-food sector in order to identify opportunities

Synopsis
Total non-food has struggled compared to total retail in recent years; however, the grocers have outperformed both, as their high levels of footfall have provided them with a captive audience of shoppers looking for value and convenience in non-food.

In the five years to 2014 each of the Big Four grocers has increased its share of the non-food market, as these sectors became more important to help improve the performance of their larger stores in particular. Tesco remains dominant thanks to its significant space advantage and market leading position in the food and grocery sector.

Health and beauty continues to dominate the grocers' non-food offer and will be the fastest growing sector. This is a reflection of the continued improvements that the grocers have made to their offers. The addition of services such as cosmetics counters, nail bars and pharmacies has all helped make them more competitive.

Reasons To Buy
- Which retailer will gain the most market share in non-food in 2014 and why?

- What impact will smaller stores have on non-food sales, and how will grocers incorporate an effective online offer?

- What sectors are the grocers underperforming in and how can they turn their performance around in these sectors?

- How does the growth in the grocers non-food market compare to total retail and the total non-food market?

Table Of Contents

Non-food in the UK | Verdict Sector Report
Table of Contents
1 Outlook
1.1 Overview
1.2 Main Conclusions
1.2.1 Grocers set to outperform wider non-food market
1.2.2 Health and beauty will continue to dominate…
1.2.3 …while music and video loses share
1.2.4 Big Four grocers gain market share as Tesco remains dominant
1.2.5 Grocers must increase the appeal of their non-food offer
1.2.6 Offering all products to customers regardless of channel must be the aim for grocers
1.2.7 Grocers are underperforming in three growing sectors
2 Recommendations
2.1 Overview
2.2 Retailer Strategies
2.2.1 Instore services will drive non-food sales
2.2.2 Specialist service vital to support big ticket sales
2.2.3 Improvements to visual merchandising will drive footfall increases
2.2.4 Multichannel offer must be consistent across channels
2.2.5 Customer focus is essential
3 Market Size
3.1 Overview
3.2 Market Definitions
3.3 Non-food Market
3.4 Grocers' Non-food Sales
3.5 Market Segmentation
4 Market Forecast
4.1 Overview
4.2 Market Definitions
4.3 Non-food Market
4.4 Grocers' Non-food Sales
4.5 Market Segmentation
5 Channel Shares
5.1 Overview
5.2 Grocers Steal Share from Specialists in Key Sectors
5.2.1 Music and video declines mirror wider sector woes
5.2.2 Sainsbury's to achieve fastest growth
5.3 Health and Beauty in Grocers
5.3.1 Sector expenditure
5.3.2 Market shares
5.4 Clothing and Footwear in Grocers
5.4.1 Sector expenditure
5.4.2 Market shares
5.5 Electricals in Grocers
5.5.1 Sector expenditure
5.5.2 Market shares
5.6 Homewares in Grocers
5.6.1 Sector expenditure
5.6.2 Market shares
5.7 Music and Video in Grocers
5.7.1 Sector expenditure
5.7.2 Market shares
5.8 Other Non-food in Grocers
5.8.1 Definition
5.8.2 Sector expenditure
6 Market Shares
6.1 Overview
6.2 Big Four Still Enjoying Growth in Non-food Sector
7 Sector Trends
7.1 Overview
7.2 Improved use of Space can Make Grocers Non-food Destinations
7.3 Partnerships Drive Better Engagement and use of Space
7.4 Online Non-food is Taking off for Grocers
7.4.1 Sainsbury's case study
7.4.2 AO.com: online best practice
8 Methodology
8.1 Methodology: Outlook Market size
8.1.1 Market shares
8.1.2 Sales density calculation
8.2 Methodology: Market Size
8.2.1 Market size
8.2.2 Market shares
8.3 Methodology: Market Forecast
8.3.1 Market size
8.3.2 Market forecast
8.4 Methodology: Channel Shares
8.5 Methodology: Market Shares
8.5.1 Market size
8.5.2 Market shares
8.5.3 Sales density calculation
8.6 Methodology: Sector Trends
8.6.1 Market size
8.6.2 Market shares
9 Appendix
9.1 Appendix: Outlook
9.1.1 Abbreviations
9.1.2 Definitions
9.2 Appendix: Recommendations
9.2.1 Abbreviations
9.2.2 Definitions
9.3 Appendix: Market Size
9.3.1 Abbreviations
9.3.2 Definitions
9.4 Appendix: Market Forecast
9.4.1 Abbreviations
9.4.2 Definitions
9.5 Appendix: Channel Shares
9.5.1 Abbreviations
9.5.2 Definitions
9.6 Appendix: Market Shares
9.6.1 Abbreviations
9.6.2 Definitions
9.7 Appendix: Sector Trends
9.7.1 Abbreviations
9.7.2 Definitions
10 Appendix
10.1 About Verdict Retail
10.2 Disclaimer

List of Tables
Table 1: Non-food in grocers definitions, 2015
Table 2: Food and grocery, non-food and total retail market sizes (£m), 2005-15e Total retail
Table 3: Non-food in grocers definitions, 2015
Table 4: Food and grocery, non-food and total retail market sizes (£m), 2010-20e
Table 5: Grocers' share of total health and beauty sector (%), 2010-15e
Table 6: Grocers' share of grocers' health and beauty sector (%), 2010-15e
Table 7: Big Four grocers' share of total clothing and footwear sector (%), 2010-15e
Table 8: Big Four grocers' share of grocers' clothing and footwear sector (%), 2010-15e
Table 9: Big Four grocers' share of total electricals sector (%), 2010-15e
Table 10: Big Four grocers' share of grocers' electricals sector (%), 2010-15e
Table 11: Big Four grocers' share of total homewares sector (%), 2010-15e
Table 12: Big Four grocers' share of grocers' homewares sector (%), 2010-15e
Table 13: Big Four grocers' share of total music and video sector (%), 2010-15e
Table 14: Big Four grocers' share of grocers' music and video sector (%), 2010-15e
Table 15: Grocers' shares of total non-food market (%), 2010-15e
Table 16: Grocers' shares of total grocers' non-food market (%), 2010-15e
Table 17: Online non-food market split by fulfilment method (£m), 2015 and 2020e
Table 18: Preferred method of fulfilment for food and grocery shopping if all were available (%), 2015
Table 19: Online satisfaction from non-food purchases

List of Figures
Figure 1: Year-on-year expenditure change in food and grocery and non-food (%), 2010-15e
Figure 2: Total non-food market expenditure (£m) and year-on-year change (%), 2010-15e
Figure 3: Total non-food market sources of growth (%), 2010-15e
Figure 4: Non-food share of Big Four grocers' retail sales (%), 2010-15e
Figure 5: Total non-food sales via grocers (£m) and year-on-year change (%), 2010-15e
Figure 6: Total non-food growth, grocers' non-food growth and total retail growth (%), 2010-15e
Figure 7: Sector shares of grocers' non-food market (%), 2010-15e
Figure 8: Year-on-year expenditure change in food and grocery and non-food (%), 2015e-20e
Figure 9: Total non-food market expenditure (£m) and year-on-year change (%), 2015e-20e
Figure 10: Total non-food market sources of growth (%), 2015e-20e
Figure 11: Total non-food sales via grocers (£m) and year-on-year change (%), 2015e-20e
Figure 12: Total non-food growth, grocers' non-food growth and total retail growth (%), 2015e-20e
Figure 13: Sector shares of grocers' non-food market (%), 2015e-20e
Figure 14: Non-food in grocers sector summary, 2015e
Figure 15: Grocers' share of total non-food market by sector (%), 2015e-20e
Figure 16: Grocers' share of total non-food in grocers market by sector (%), 2015e-20e
Figure 17: Grocers' non-food sales growth rates by sector (%), 2010-20e
Figure 18: Big Four grocers' share of total non-food market (%), 2010-15e
Figure 19: Big Four grocers' share of total grocers' non-food market (%), 2010-15e
Figure 20: Health and beauty sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 21: Total health and beauty growth and grocers' health and beauty growth (%), 2010-20e
Figure 22: Grocers' share of total health and beauty sector (%), 2010-15e
Figure 23: Big Four grocers' share of grocers' health and beauty sector (%), 2010-15e
Figure 24: Clothing and footwear sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 25: Total clothing and footwear growth and grocers' clothing and footwear growth (%), 2010-20e
Figure 26: Big Four grocers' share of total clothing and footwear sector (%), 2010-15e
Figure 27: Big Four grocers' share of grocers' clothing and footwear sector (%), 2010-15e
Figure 28: Electricals sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 29: Total electricals growth and grocers' electricals growth (%), 2010-20e
Figure 30: Big Four grocers' share of total electricals sector (%), 2010-15e
Figure 31: Big Four grocers' share of grocers' electricals sector (%), 2010-15e
Figure 32: Homewares sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 33: Total homewares growth and grocers' homewares growth (%), 2010-20e
Figure 34: Big Four grocers' share of total homewares sector (%), 2010-15e
Figure 35: Big Four grocers' share of grocers' homewares sector (%), 2010-15e
Figure 36: Music and video sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 37: Total music and video growth and grocers' music and video growth (%), 2010-20e
Figure 38: Big Four grocers' share of total music and video sector (%), 2010-15e
Figure 39: Big Four grocers' share of grocers' music and video sector (%), 2010-15e
Figure 40: Other non-food sales via grocers (£m) and year-on-year change (%), 2010-20e
Figure 41: Total other non-food growth and grocers' other non-food growth (%), 2010-20e
Figure 42: Big Four grocers' shares of total non-food market (%), 2010-15e
Figure 43: Big Four grocers' shares of total grocers' non-food market (%), 2010-15e
Figure 44: Homewares offer at Tesco Extra Watford, 2014
Figure 45: Dinnerware product display at Sainsbury's Epsom, 2014
Figure 46: : Product integration at a Wholefoods Market, London, 2014
Figure 47: Asda instore order point, 2014
Figure 48: Tesco offers technical support at its instore phone outlets, 2014
Figure 49: John Lewis promoting its five year guarantee on all televisions, 2014
Figure 50: Nail bar at Tesco Extra, Watford, 2014
Figure 51: Beauty area at Carrefour Planet
Figure 52: Argos within a Sainsbury's store, 2015
Figure 53: Burrito Kitchen counter, Tesco, Villiers Street, London, 2015
Figure 54: Proportion of shoppers buying instore when collecting a click and collect order (%), 2015
Figure 55: Additional instore spend when collecting a click and collect order (£), 2015
Figure 56: Wiggle Cycle Advice and Service Centre, Homebase, St Albans, 2014
Figure 57: Non-food offer on Sainsbury's website, 2015
Figure 58: Motivations for switching to another online store for food shopping (%), 2015
Figure 59: Proportion of shoppers buying instore when collecting a click and collect order (%), 2015
Figure 60: Additional spend among non-food click and collect shoppers instore (£), 2015
Figure 61: Motivation for repeat purchase of non-food items, market average versus grocers (%), 2015
Figure 62: Motivation for repeat purchase of non-food items, market average versus grocers, by retailer (%), 2015
Figure 63: Motivation for repeat purchase of non-food items, market average versus grocers, by retailer (%), 2015
Figure 64: AO.com delivery options, 2015
Figure 65: AO.com Eco delivery option, 2015
Figure 66: Autocomplete search function on AO.com, 2015
Figure 67: Market forecast methodology

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