As just one more indication of the delicate state of the UK economy, latest figures released by Sainsbury’s show that customers have abandoned high street stores in order to take advantage of cheaper prices at supermarket chains.
Where just a few months ago staples such as milk, bread and chicken were hot selling items in the country’s supermarkets, now the large chains are reporting huge profits on DVDs, video games and yes, even whisky. With the ability to offer significantly lower prices on these items, chains like Sainsbury’s have been systematically ‘stealing’ customers away from high street retailers.
According to the Telegraph, Sainsbury’s reported that Call of Duty, Modern Warfare 3 was the best selling item in their stores whilst they expect the Harry Potter and the Deathly Hallows pt 2 DVD to be the hottest selling item leading up to the holidays. Normally groceries such as milk or chicken would be the largest selling items but the ability to beat out high street retailers on DVD and video game pricing has changed the way consumers are shopping
According to the company’s commercial director, Mike Coupe, Sainsbury’s new strategy is to increase the sale of non-food items by 70% and have recently began carrying a line of women’s clothing. At the moment the chain has almost a 10% share of the non-food market amongst supermarket chains and controls 17% of the food portion of the market. This is based on value of items sold, not volume.
Just as online retailers have been capturing a huge portion of the market in electronics, supermarkets continue to capture greater portions of the non-food market in a number of areas as well. This does not bode well for already troubled high street merchants.
