Blog: Trolley dash
Leonie Barrie | 21 May 2007
Sainsbury’s is confident that its Tu own label clothing range will be able to underpin ambitious sales growth in the company’s non-food offer. And with profit margins on non-food sales typically higher than the margin on food (even premium food), this could be the most logical way of achieving its sales goal.
Asda and Tesco have grown non-food ranges aggressively in recent years (the George and Florence & Fred lines respectively). But their experience has also shown that getting the right balance between non-food and food is not easy and that management time and store space still need to be focused on the core food ranges if the business as a whole is to continue to grow.
Sainsbury’s has also failed to reveal exactly how it intends to expand its clothing lines, other than pointing to new layouts, fixtures, fittings. Its plans could also be scuppered by a resurgent Asda which is mulling the expansion of its Asda Living concept from seven stores up to a possible 300. Another threat includes fears that consumer spending will be hit by higher interest rates.
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