Grocers' profits from non-food are poised to surge, but only if the food giants change the way they sell such products, according to retail research house Verdict.
It said total non-food sales will be worth as much as£19.9 billion in 2007 - a 71 per cent increase over 2002. Of every additional£5 of operating profit to be attained by grocers in 2007, Verdict expects£4 to come from non-food sales.
Grocers have a good reputation for delivering low-cost goods. They have the buying power to keep prices low, and huge numbers of potential customers going through their stores. But they are still trying to sell hi-fis the same way they sell breakfast cereals, said Verdict.
Non-food items are often higher-value, one-off purchases, and buyers need greater visual stimulation and often persuasion from staff, which supermarkets aren't delivering.
'Merely putting boxed product on shelves is not good enough,' said Non-food in Grocers 2003. 'Non-food offerings are being let down by poor in-store disciplines, inconsistent ranging and limited dedicated staffing.'
Verdict expects grocers' sales gains in the period up to 2007 to be greatest in health and beauty, expected to rise by£2 billion. The biggest proportional increase is likely to be in electricals, where the share should climb by 126 per cent or£800 million.
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