Grocers already take close to a 10% share of the UK’s clothing market and it’s a trend that’s growing, with Morrisons finally set to enter the fray

Why are we talking about it now?

Morrisons looks poised to become the final one of the big four grocers to move into clothing. The supermarket group has been in talks with former Next boss George Davies, who launched Asda’s George range and then Per Una for Marks & Spencer.

How big is the market?

Analyst Verdict calculates that grocers account for 9.2% of the UK clothing market by share and racked up sales of £3.4bn in 2010.

What’s in it for Morrisons?

Supermarkets benefit from high footfall, hence the opportunity to make lucrative incremental sales as customers pick up a new T-shirt with their tea bags. The market is still growing. Sainsbury’s, which made a relatively late push into clothing in 2004, is dedicating more space to its Tu fashion range, sales of which have risen fourfold to £587m in the past five years. Clothing also generates higher margins than groceries - 12% to 15% compared with 7% in food, according to Verdict.

Morrisons has already tested clothing in stores. It teamed up with value retailer Peacocks last year to open concessions in some stores. “I’d imagine it will start with childrenswear,” says Verdict practice leader Maureen Hinton. “That’s a quick win and will build loyalty with its core audience of mothers.”

Is George Davies the right man for the Morrisons job?

Food and fashion deploy distinct sourcing, operations and merchandising processes so it makes sense for Morrisons to bring an expert in to develop its range.

Despite his last venture, GIVe, not being as successful as his previous businesses, Davies is still the man to go to for a fashion launch, Hinton believes. “I imagine he’d stay there for a good couple of years until the range beds down and then Morrisons would take it in-house,” she says.

What’s next for supermarket fashion?

Hinton expects grocers’ sales of clothing in supermarkets and online to continue growing, but standalone chains are unlikely after an abortive pilot by Asda. “George proved that standalone stores don’t work. You have extra overheads and substantially less footfall,” she says.

However, grocers are likely to have to differentiate their offers. “They are good at basic clothing but not more quality, stylish garments. As consumers start to feel the pinch they may start looking for distinctive, quality pieces,” she says.

Last year, Tesco launched the F&F Couture range, targeting a more fashion-savvy shopper.