Tesco takes on high street retailers with in-store catalogue

Tesco takes on high street retailers with in-store catalogue

	Published : Tue, 25 Oct 2005 00:35 By : David Simms Print this Story

LONDON: The UK’s biggest grocer Tesco is looking to launch an in-store catalogue operation expanding its merchandise to include non-food items. The move could underscore its unchallenged position as the UK’s most successful retailer.

The Hertfordshire-based chain has already taken its first step in this direction - a trial store in Denton, Manchester opened earlier this month. A spokeswoman for the store confirmed that the store chain wants to push into the non-food sector but had no specific plans.

Tesco’s entry into this sector will be seen as a threat by other department stores and retail chains like Argos, Dixons and Debenhams who are already struggling with the continuing slowdown in consumer spending.

In an earlier statement, chief executive Sir Terry Leahy did say that he planned to double the store’s sale of non-food items which contributes 20 percent to Tesco’s annual turnover of £30bn.

The store currently has a 30.5 share of Scotland’s grocery market. It is said that of every £8 that is spent in the UK, £1 is spent at Tesco’s. Regulatory restrictions have limited the store’s expansion which, the store is looking to compensate for, by doubling its sale of non-food items.

The grocer recently concluded a trial of Internet kiosks at 90 stores. If plans take shape shoppers could soon see merchandise like television sets and furniture at some of the larger Tesco stores. It has earmarked some large sites where it could sell bulkier items like furniture as these take up huge spaces. Next month the store will also be adding a huge 750,000 sq ft distribution centre to cope with increased demand.

In non-food items, the store has already made some progress with electronic items sale surging 11 percent and clothing sales having grown 15 percent in the first six months of the year.

With the in-store catalogue operation Tesco could dispense with the storage of bulkier items which require large store space.

Tesco’s other businesses such as insurance, finance and mobile phones have also been keeping pace with the grocer’s growth.