Has the one-stop shop arrived?

Think of almost any human activity and a supermarket can sell you something to help. Need to go to a nursery? Drop the kids off at Sainsbury's in Castle Point, Bournemouth, where they can learn while you shop. Left school without enough qualifications? Through the power of Tesco Clubcard you can get discounts on your Open University course. Fretting about the cost of your nuptial gig? You can buy a wedding dress and a diamond ring from Asda and still have change from £900. Want to get on the property ladder? Visit the Homes in Asda website. For years supermarkets have been claiming to be one-stop shops, but now it seems these boasts have finally become reality. From cradle to grave, if you need it, a supermarket somewhere will sell it. In certain parts of the US, for example, your family can buy your coffin at a local discount store. But even if you just fall ill you can, in many US cities, get treated at the in-store clinic. Now Asda is planning to become the first UK supermarket to open after-hours GP surgeries in its stores across Britain. To some, this approach smacks of commercial totalitarianism. But take a step back from the media furore - which often stereotypes Tesco magnate Sir Terry Leahy as a Bond villain - and diversification makes sense for both supermarkets and consumers. If you believe opinion polls, newspaper columns and the growing band of websites launched by activists, supermarkets in Britain are slightly less popular than Jade Goody. But one of the paradoxes of modern capitalism is that we have more rights as consumers than we do as voters. If Sir Terry volunteered Tesco to run the Home Office, we'd probably be relieved. After all, Tesco has a reasonable record of delivering on its promises. So for a silent, slightly guilty majority, the idea of living entirely on stuff from our local supermarket is comforting. If we trust the retailer, we're happy to buy different stuff from them. Tesco, for example, has five million personal finance customers (and makes a cool £200m from them). Supermarkets sell an expanding portfolio of products, ranging from insurance to golf driving nets, from mortgages to power drills. The number of items varies from about 20,000 in standard stores to 100,000 in a hypermarket. In fact, the nation's trust in its supermarkets may explain why the government is keen for stores to house doctors' surgeries and even prison cells to confine yobs until the police (who, in parts of London, do some basic training in supermarket aisles) can drop in. And under pilot schemes, if you're a crime victim, you will soon be reporting it to a bobby based in your supermarket. There is a catch, though. You can buy almost anything from a supermarket - as long as it's popular. If you're one of the few remaining people in the UK yet to read The Da Vinci Code, you can still snap it up at a bargain price. But you won't find a biography of Leonardo da Vinci. The same stultifying principle applies, in varying degrees, to CDs, DVDs and magazines. The bad news for those, like TV chef Hugh Fearnley-Whittingstall who see supermarkets as a threat to society as we know it, is that this diversification isn't going to stop. "The trend took off in the late 1990s, picking up pace in 2000 onwards," says Richard Dodd at the British Retail Consortium. "The maturity of the food market and price competition between multiples resulted in thinning margins in many areas. While supermarkets encouraged customers to spend more by trading up to premium products, the lack of margin on food is one factor motivating their move into non-food." With supermarkets taking 72% of the £76bn Britons spend on their groceries ever year, they have had to diversify to grow. Sales of major non-food categories through grocery multiples increased by 61% between 2000 and 2004 to reach a value of £12.8bn, says Dodd. David Gordon, director of UK research at IGD, points out that this growth has been driven, in part, by stores launching their own dedicated non-food formats such as Asda's George clothing range and general merchandise brands such as Asda Living, which was launched in 2004, and Tesco Homeplus, which opened in 2005. Asda's move into jewellery - it sold cut-price replicas of the wedding ring Camilla wore when she married Prince Charles - is a sign of how fast supermarkets can respond. "Asda monitored consumer spending and discovered a 42% increase in household spending on jewellery between 2000 and 2004," says Dodd. "So it installed jewellery counters in the George areas at its stores." Retailers use different strategies to drive diversification (see box). Some have stuck closely to a food base. Others - especially Tesco and Asda - have created stores with such a wide product range they have become destinations in their own right. Some destination stores devote only half their space to food. Sainsbury's has so far chosen a third way, selling complementary non-food items. These strategies are not mutually exclusive. "A retailer may choose to be a destination for clothing, offering high levels of choice and range, but offer a limited core range for electricals, supported by spot buys and 'when it's gone it's gone' deals," says Gordon. Then there's the internet. Online grocery sales are worth £1bn a year to Tesco alone, via its online catalogue, which sells anything from swimming pools to surfboards. In the US, Wal-Mart has blazed the trail for the next big diversification: health. After a successful test of 75 clinics in 12 states, it plans to open 6,600 in-store medical clinics over the next five years. In the UK, Sainsbury's is keen to house GP surgeries, while Asda is in talks to open late-night surgeries. Diversifying into health helps to circumvent the problem starting to bedevil US retail. The proportion of US women who cite shopping as a 'pick-me-up' has plunged from 45% to 21% in 10 years, according to US trends report What's Next, while 53% of US shoppers say they hate shopping. One solution has been to create stores - and malls - disguised as community centres, to defuse some of the fury over supermarkets' impact on local communities. So has the one-stop shop truly arrived? Not exactly, but it is not far off. Supermarkets are yet to crack the car market, nor have they shown great interest in funerals. "IGD research suggests that, for high-value, high-involvement products, some prefer to shop at a specialist," says Gordon. Dodd adds that retailers will steer clear of areas where they have little specialist knowledge, such as kitchens and bathrooms. However, if Asda is selling houses, kitchens or bathrooms could easily be next. As Gordon says: "A few years ago shoppers wouldn't have bought white goods in a supermarket, so it's hard to predict their future ­preferences."10 products you probably didn't know you could buy at a supermarket Tickets to see Wrexham play football, Asda A thousand tickets were sold at the town's Asda store in March as the club sought support for a vital game. Anti-virus software, Tesco Tesco sells own-label anti-virus software for £10 and similarly modestly priced office software, which should annoy Microsoft. Pole dancing kit, Tesco The Peekaboo Pole Dancing Kit has been removed from the toys section of Tesco.com, but is still in the fitness section, with Peekaboo dollars to reward dancers. Airline ticket to Europe, Lidl Last year, budget airline Air Berlin offered vouchers to Lidl customers which, for £19, could be redeemed for a one-way ticket to European destinations. Computer game in which player kills or converts non-Christians or plays as the anti-Christ, Wal-Mart (US) Left Behind: Eternal Forces has caused widespread offence, but Wal-Mart sells it at 200 US stores. Electricity and gas, Sainsbury's The retailer has teamed up with EDF Energy to solve consumers' utility needs. Equestrian outfit and grooming kit, Tesco Last year, 100 Tesco Extra stores sold head-to-toe equestrian outfits for less than £100. Coffin, Costco (US) Costco sells caskets for less than $1,000. Blogger Ryan McGee noted: "If I saw my family burying me in a Costco coffin, I'd cut a deal to come back and haunt them." A six-bedroom detached bungalow in Carlisle for £350,000, Asda One of the properties on sale through Asda's property site www.homes-in-asda.com Live turtles, Tesco (China) Only on sale at Tesco's Beijing store, but to much protest from animal rights activists.The different strategies Limited range: These stores offer a limited non-core food range with WIGIG (when it's gone it's gone) special offers, one-day specials, often promoted by flyers. Who: Aldi, Netto, Lidl Complementary range: Stores offer complementary non-food products (eg, soft furnishings, DVDs, CDs) that encourage existing shoppers to spend more, using occasional special-purchase items to create a sense of 'theatre'. Who: Sainsbury's, Morrisons, Somerfield Destination range: Stores with a range of categories (eg, clothing, household goods, furnishings, sports goods) relying on the combination of food and non-food to create a 'destination' pull. Who: Tesco, Asda Stealth retail: Stores and malls that incorporate non-retail elements to function like old fashioned town centres, with doctors, libraries, sports facilities, etc, nearby. Who: Migros - it has created health and education centres in Switzerland; Wal-Mart - it has 2,256 super centres, many with a bank, garden centre and family fun centre, and is diversifying into health care