Tesco this week added products from sex toy specialists Lovehoney in 250 of its Extra branches.
It seems that sex toys are in high demand these days. They’ve been a popular buy during lockdown and mainstream retailers have tried to join in.
In the US, beauty giant Sephora this month began selling vibrators from two different sex toy retailers, Maude and Dame, while department stores Nordstrom and Bloomingdale’s added vibrators to their offerings last year.
For Tesco, this is the latest step in fine-tuning its product offering as it focuses on higher-growth areas.
Earlier this month, the grocer confirmed to Retail Gazette that it was “phasing out” CDs and DVDs to focus on “ranges where we see the highest demand from customers.” As a replacement for CDs and DVDs, it chose homewares and outdoor products, which are still popular with shoppers who are spending more time at home after the pandemic.
Tesco is not alone. Other grocers are constantly adjusting their offerings and introducing new high-growth in-store categories. But what are they focusing on to generate additional sales? Retail Gazette finds out.
Vaping is big business these days. Walk down any main street and you’re bound to find at least one vape shop as there are almost 3,000 in the UK right now. No wonder, as 7.1 million adults in the UK vape.
Grocers are trying to replace lost revenue with dwindling cigarettes by becoming the go-to place for vaping goods. According to Kantar data for the year ended November 21, 2021, they already hold almost a third of the vaping market share but are targeting a larger share of the market.
Shopper Insights founder Bryan Roberts says: “Vapes is a huge growth area and it’s notable that Sainsbury’s has flipped the ends of a few stores to stock an extensive vape range, while Asda has a vape shop-in- Shop opened with specialist Totally Wicked Milton Keynes store.”
Sustainability is becoming increasingly important to shoppers as many seek to reduce the amount of single-use plastic they use. This has prompted some shoppers to purchase product refills to minimize packaging waste.
The big supermarket groups have started trying their hand at refill stations to cater to this customer.
M&S has launched its refillable ‘Fill Your Own’ concept in 11 stores, while Waitrose has launched its own version, Waitrose Unpacked, in 13 stores and has even incorporated unpackaged items into the regular aisles of its Wallingford, Oxfordshire store.
Meanwhile, just this week, Nisa announced it would be introducing a refill station to its revamped local format.
Asda has gone one step further and opened dedicated refill stores. It now has three pack-free stores, having opened its first in Leeds in October 2020.
The stores offer branded products such as PG Tips, Vimto, Kellogg’s, Radox and Persil, as well as private labels. Customers bring their own storage bins to replenish items such as tea, coffee, rice, pasta and washing powder.
The retailer is testing the sustainable store concept to see which elements can be developed on a large scale and rolled out to more locations.
Expect refill stations and refillable products to become ubiquitous over the next few years.
This is by no means a new category, as major supermarkets have been ramping up their meatless options in recent years to capitalize on growing demand.
In September 2020, Sainsbury’s increased the store space allocated to fresh plant-based ranges by 40%, while in the same month Asda launched two dedicated vegan shelves filled entirely with plant-based products.
However, expect the space for plant-free products to accelerate over the next few years.
Nidhi Chauhan, senior consumer analyst at GlobalData, believes grocers will continue to invest heavily in plant-based eating concepts.
“Greater innovation is needed to excite customers and entice them to try something new, but it’s especially important again this year as meat prices rise so grocers can use plant-based options as more affordable meat alternatives,” he says.
“In addition to developing plant-based private labels, it will be important for grocers to work with brands to give plant-based ranges credibility and showcase quality.
“For example, Beyond Meat has partnered with Tesco to launch a new range of plant-based ready meals in 2021 and we expect more of these collaborations in 2022, which will help spur spending.”
pick & mix
Since Woolworths’ demise, Wilko has been the only mainstream retailer to target Pick & Mix in a big way. That is until now.
Roberts believes grocers will begin rolling out Pick & Mix in stores when the HFSS legislation goes into effect later this year.
The legislation restricts the advertising of foods high in fat, salt and sugar in places such as end-of-aisle displays, store entrances and checkout counters.
However, Pick & Mix is exempt from the legislation, creating a growth opportunity for supermarkets, according to Roberts, who expects brands and retailers to work together to install Pick & Mix units at gondola ends or in front of stores.
CONTINUE READING: Tesco: the groundbreaking initiatives it is using to cut funding
Meal kit providers Hello Fresh and Gousto have thrived during the pandemic as shoppers spent more time cooking at home during the lockdown and demand for such services remained strong.
According to GlobalData’s latest consumer survey conducted in the last quarter of 2021, 42% of consumers enjoy preparing meals from scratch at home.
That steals valuable stake from the big grocers, all of which will be looking to win back that customer. According to Chauhan, not only will grocers up their game in terms of their convenience food and ready-to-eat options, but they’ll also be looking to make their own cooking options from scratch.
“Product innovation will be critical to differentiate from the competition and capture the growing segment, especially this year in the UK. With household budgets tightening due to inflation, consumers will look for convenience in these types of product ranges,” he says.
Waitrose has partnered with Mindful Chef, the recipe box service it tried to buy in 2020 Create a co-branded kit that went on sale in January.
However, expect more activity around the meal kits in grocery stores, including connections with established suppliers.
Tesco has already signed a deal with meal kit company Simply Cook to launch an in-store meal kit offering. Last year Britain’s largest supermarket introduced a ‘Let’s Cook’ cooler in 1,300 of its express stores, inviting shoppers to cook a meal for two for £6.
Shoppers choose one protein, like chicken, or a plant-based alternative, one vegetable, and one carbohydrate to pair with their SimplyCook ingredient set of choice. Kits include Caribbean Jerk BBQ and Japanese Miso Rice Bowl.
The government announced earlier this week that it would scrap free lateral flow and PCR testing from April 1. Only nursing home residents, hospital patients and other vulnerable groups will continue to receive free testing if they have Covid symptoms.
This has led to a rush from retailers trying to include Covid test kits in their offerings.
Boots was first to market, revealing the day after the Government unveiled the Living with Covid plan that it would start selling tests online at £5.99 for a single test or £17 for a pack of four, postage included. From early March the tests will be available in more than 400 Boots stores at the reduced price of £2.50 for a single test and £12 for a pack of five.
However, Superdrug has already undercut Boots by committing to sell a single lateral flow test priced at £1.99 and a 5-pack at £9.79.
Grocers are expected to follow suit and cut prices. Discounter Lidl is already conducting tests in its Irish and German stores, while Aldi is offering lateral flow tests in its European stores.
The tests are likely to be in high demand during the seasonal Covid peaks and will no doubt generate additional sales for the big supermarket groups.
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