Sainsbury’s will launch a new home brand in two stores this weekend as part of its drive to ramp up its non-food offer, as revealed in today’s Retail Week.
Under its new Tu home banner, the grocer will introduce 1,700 home products, including kitchenwares, bathroom fittings, lighting and soft furnishings in two Sainsbury’s stores – at Sydenham in London and Oldbury, West Midlands.
The trial, which will be extended to eleven stores by September 2009, will reopen the debate about whether Sainsbury’s should be chasing the non-food pound so aggressively, given its strong reputation for quality produce and the relatively small size of its stores compared with Asda and Tesco.
However, what is often overlooked when its non-food credentials are discussed is Sainsbury’s non-food online offer, which is a still a relatively small operation compared with Tesco and Asda.
At present, Sainsbury’s non-food web offer is meagre compared with Asda and is dwarfed by Tesco’s. Clicking on to Tesco Direct it is hard to think of any non-food categories – with the exception of cars and clothing, which the grocer has sold but is now reviewing – that Tesco does not sell.
However, on Sainsbury’s web site most categories, such as books, entertainment and electricals, as well as sports and garden equipment, are conspicuous by their absence. The grocer’s offer is limited to food and wine, white goods, kitchen appliances, flowers and gifts.
Given Sainsbury’s pick-in-store e-commerce model, chief executive Justin King has always argued that the grocer’s relatively small stores limit its online expansion.
But Tesco has shown the way forward by opening a dedicated distribution centre for Tesco Direct and Asda plans to open a dedicated one for its online own-label non-food products later this year.
No doubt, Sainsbury’s will want to add another non-food distribution centre over time to its existing warehouse in Coventry, which it has primarily used for clothing to date. The sooner it complements its pick-in-store model with an expanded distribution capability the better.
However, until it starts to sell more non-food online, Sainsbury’s will continue to miss out on sales that it could easily grab using its already successful non-food offer.
After the launch of its Tu home offer this weekend, it seems likely Sainsbury’s will seek to introduce further Tu non-food brands in stores over the next 12 months, which will be put online eventually. Despite Sainsbury’s denying both plans, it is understood that the grocer is gearing up to launch clothing online and a combined non-food web site and catalogue over the next year or so.
Its non-food drive might not please all its middle-class customers – particularly older ones, who prefer Sainsbury’s fresh produce offer to other grocers – but the general merchandise revolution at Sainsbury’s has only just begun. However, if it is to catch up with Tesco and Asda, it needs to put its foot on the non-food online accelerator.