Consumers shopping for DVD players, kettles and TVs are increasingly spurning established names such as Comet and Currys in favour of the supermarkets, according to new research.
The grocery multiples grew their share of the £21.4bn electricals market from 2.9% to 3.4% in 2003, which represents a 22% leap in value sales from £597m to £727m, according to a new report from Verdict.
Meanwhile, the market share of established names such as Comet and Currys remained static or in decline.
The figures support research by The Grocer in our Non-Food Report in December, where Information Resources data showed 19.5% year-on-year growth for electricals in grocery in the year to November 2003.
If growth continued at this rate, the supermarkets’ sales of electricals could top £1.5bn by 2008, said Verdict senior analyst Steve Gotham.
“By 2008, we estimate the grocers will have 5.3% of a £28.4bn market.
“They are getting good deals and their ranges are in many cases as good as some of the specialist retailers.
“But they are also benefiting from a halo effect. People assume they are getting a good deal if they buy this equipment from Tesco or Asda.”
Although net margins were
just 3-6% on electricals - significantly less than some other non-food categories in the supermarkets - they generated a good cash profit and the market was growing very fast, said Gotham. While the supermarkets would not necessarily be at the vanguard when it came to digital technology, they would reap the benefits as it became more mass market, he added.
Asda and Sainsbury have doubled their electricals ranges since 2001, while smaller players such as the Co-operative Group have also boosted ranges over the last 18 months.
The society’s head of trading for non-food, Mark Owen, said space devoted to electrical goods at the society’s food stores had increased 15% in the last two years, with 38 new products being added this summer.
He added: “The fact that our customers are constantly looking for recognisable brands that offer value for money gives us an opportunity to provide a credible offering, even within our smaller stores.”
Elaine Watson
The grocery multiples grew their share of the £21.4bn electricals market from 2.9% to 3.4% in 2003, which represents a 22% leap in value sales from £597m to £727m, according to a new report from Verdict.
Meanwhile, the market share of established names such as Comet and Currys remained static or in decline.
The figures support research by The Grocer in our Non-Food Report in December, where Information Resources data showed 19.5% year-on-year growth for electricals in grocery in the year to November 2003.
If growth continued at this rate, the supermarkets’ sales of electricals could top £1.5bn by 2008, said Verdict senior analyst Steve Gotham.
“By 2008, we estimate the grocers will have 5.3% of a £28.4bn market.
“They are getting good deals and their ranges are in many cases as good as some of the specialist retailers.
“But they are also benefiting from a halo effect. People assume they are getting a good deal if they buy this equipment from Tesco or Asda.”
Although net margins were
just 3-6% on electricals - significantly less than some other non-food categories in the supermarkets - they generated a good cash profit and the market was growing very fast, said Gotham. While the supermarkets would not necessarily be at the vanguard when it came to digital technology, they would reap the benefits as it became more mass market, he added.
Asda and Sainsbury have doubled their electricals ranges since 2001, while smaller players such as the Co-operative Group have also boosted ranges over the last 18 months.
The society’s head of trading for non-food, Mark Owen, said space devoted to electrical goods at the society’s food stores had increased 15% in the last two years, with 38 new products being added this summer.
He added: “The fact that our customers are constantly looking for recognisable brands that offer value for money gives us an opportunity to provide a credible offering, even within our smaller stores.”
Elaine Watson
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