Grocer ups its homewares offer as the market cools

Sainsbury’s is branching out into homewares, it has emerged this week, with packaging by Parker Williams and retail design by 20/20, just as analysts question the viability of the sector.

Trends monitor Verdict has warned that, while the supply side of the market is looking increasingly well furnished, consumer demand is softening.

By the end of October, 285 Sainsbury’s stores across the UK will sell non-food products, including cookware, tableware, home accessories and textiles. Around 80 supermarkets will have a dedicated home area by next year.

Brands as diverse as Argos and Marks & Spencer have expanded their homewares offers recently, gambling on consumers’ appetite for ‘nesting’ and home decoration.

Significant projects for designers have been the result, but Verdict says there will be ‘insufficient sales to go around’, adding that design must deliver ‘genuine credibility and compelling value’ for customers.

The market was worth an estimated £9.7bn in 2002, but, according to the analyst, a period of ‘reckoning’ may be just around the corner.

Retailers will need ‘a much clearer understanding of the customer, with edited ranges more closely aligned to shopper requirements’, if they are to be successful, says the report.

For Tyler Brûlé, Winkreative chief executive and creative director, the key word is ‘legitimacy’ – ‘having the right design and buying team’ to commission an appealing and credible product range.

‘Many retailers have just been chucking candlesticks on the shelf and calling it a homewares department,’ he says. ‘But what they need to do is complete the story for consumers.’

‘Strong category management’ is essential, agrees Big Idea Brand Management creative director Bill Wallsgrove, who has worked extensively with B&Q.

‘Good, better, best offers need to be clearly signposted, particularly with merchandising and point-of-sale, [because] some purchases are about repair, some about design and some about renovation,’ he says.

While acknowledging the incursion of fashion-led brands will affect the marketplace, Wallsgrove says businesses ‘truly rooted in the home’, like B&Q, will continue to serve a broad constituency.

However, he notes that, in the US, pile-it-high Home Depot’s market share has been ‘eroded’ by more upmarket competitors such as Lowe’s, which is ‘selling a brand promise’.

In the UK, Brûlé believes retailers will come under pressure from the likes of Zara, which has launched homewares lines in Spain. Where Zara goes, H&M is destined to follow, he says.

‘Zara is credited with being behind the “pronta moda” concept and it opens a whole new dimension when competent and fast-moving fashion brands enter the homewares market,’ Brûlé claims.

Verdict predicts Marks & Spencer’s first Lifestore, currently occupying Michael Nash Associates, Multistorey and architect John Pawson as well as Winkreative (DW 29 May), will be ‘one of 2004’s most significant retail events’, but regards homewares as a fragmented market.

Argos Retail Group, now behind Homebase’s Mi Home concept involving David Davies 517 and Lamb & Shirley (DW 4 September), leads with a share of ‘just 6.2 per cent’.

Sales space in the sector is expected to grow by 7.5 per cent by 2004, but sales growth is moderating, down to a 6.3 per cent increase over 2002-04, against a 9.1 per cent rise over 2000-02.