Tesco is to offer clothing online and improve its store environment.
Tesco has achieved significant growth in non-food, with sales increasing 12.6% in the six months to August 2006, and clothing sales increasing 16% in the year to February 2006. The retailer is continuing to focus on its clothing offer and by Autumn 2007 we can expect to see Tesco clothing available for purchase online and via catalogues.
We will also see an extended clothing range, using a number of designers, and a new clothing format to help separate clothing ranges from cleaning products. The F&F collection, launched in September 2006 and designed by Lee Rees-Oliviere is one new sub-brand, and we expect more to follow.
The move towards an upmarket clothing offer dictates the need for an improved shopping experience. While rolling out additional clothing brands, Tesco will invest in improving the clothing sales area with a shop-in-shop concept. This should work to encourage consumers who have previously been deterred from shopping for clothing in a supermarket, by providing an environment more akin to that which is provided in high street clothing retailers.
This shop-in-shop format will also provide an environment better suited to Tesco’s range segmentation. The retailer’s sub-brands allow it to stretch its price architecture and offer better quality and more upmarket ranges under different brand names. Tesco is already number four in Verdict’s value clothing market, with an 11% market share behind only George, Primark and New Look and stands to make more substantial gains in the total clothing market, where its share currently stands at 2.3%.
Continuing space expansion and the availability of clothing online will help Tesco spread its network further and we expect to see significantly enhanced clothing sales in 2007 and 2008.
Source: Verdict Research
