The UK's biggest retailer is, for the first time, to stock a wide selection of the latest gadgets from top brands such as Sony, Apple, Olympus and Canon.
The digital music range will start atÂŁ24.97 for an Inovix 128 MB player, but will also stretch to incorporate the must-have electrical products of the year, such as Apple's iPod Shuffle.
The initiative is Tesco's latest drive into non-food. The grocer's general merchandise offensive has been so successful that broker Citigroup Smith Barney believes it will swallow half of all non-food retail sales growth in the UK this year if it maintains its current performance. It predicts Tesco could lift non-food sales byÂŁ800 million excluding VAT this year.
Last year, Tesco increased non-food sales by 17 per cent to
6 billion, with home entertainment sales up 20 per cent. Citigroup said the effects of Tesco's growth will hit rivals harder in the retail slowdown.
'Tesco grew non-food sales last year by nearlyÂŁ700 million excluding VAT,' Citigroup noted. 'It brought the available market growth down from 4.7 per cent to 4.3 per cent. This is a major impact. In a year like 2005 this residual analysis is terrifying for a non-food retailer that does not have any clear profit levers.'
Tesco's push is a major blow for Dixons, which has positioned itself as a destination for digital products - using the strapline 'the future for less'.
Andrea Cockram, analyst at Verdict, believes Tesco's non-food sales are on track to overtake Dixons Group in 2006. 'Tesco is now selling more non-food than Marks & Spencer. The grocers are behind a lot of the margin pressure in electricals,' she said.
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