On 25 November, UK retail giant Tesco reported a 13.9 per cent rise in Q3 sales, largely attributable to a push into sales of non-food items. Office products play an important part of this mix, Tesco told OPI+.
"We can’t release specific figures, but we can confirm [office products] are an important part of our business, and they are important to our customers," spokesperson for Tesco Julie McGuckian told OPI+. "Increasingly, people are working from home, and families with student children appreciate the fact that they can buy affordable office products at Tesco."
The supermarket giant, the UK’s largest and currently valued at just over £23.3 billion ($40.3 billion), has tagged office products as a particular growth area. Although it typically does not release market figures, McGuckian said that by making office products more accessible and convenient, it would expect sales to rise.
Online sales of office products are also a potential growth area for Tesco. Currently, the company’s online operations account for less than 10 per cent of its non-food sales. "We have to look at investing in setting up our own supply chain for Tesco.com so that we can broaden the range of products available," CEO Terry Leahy said in a statement.
McGuckian told OPI+ that, at the moment, Tesco had no plans to expand its existing online office products range, but admitted: "We can never say never".
Indeed, at one stage Tesco probably didn’t foresee the opening of a store consisting entirely on non-food items. The chain, which boasts 1,780 stores around the UK, opened its first non-food outlet in September of this year in Manchester.
Unsurprisingly, Tesco is reluctant to disclose sales and profit figures for the non-food store, or estimations going forward. "We’ve always said this is a trial and we’ll see how it goes," said McGuckian. "Customers expect us to try new things, but our priority will always be to sell non-food alongside food as we do in our Extra stores."
Printing accessories have been a particular growth area for Tesco. McGuckian also hinted to OPI+ that the company is likely to expand its office products private label range in the future.
And of course, the back-to-school (BTS) season is crucial. In September, Tesco estimated that the BTS campaign would be worth over £1 billion ($1.7 billion). "BTS continues to grow as a business. We wouldn’t release figures but as a seasonal event it is very important to our shoppers."
With bounding growth levels, Tesco – like other retailers – is increasingly encroaching on the traditional OP reseller’s pad. It claims that it has no reason to feel guilty and is, in fact, assisting the market. "We generally find that, by making products more accessible and convenient, it grows the market," said McGuckian. "It also increases competition, which works in the consumer interest. Our range is not as extensive as a specialist so serves differing needs."
But OP resellers everywhere need to watch out. In a recent report on Tesco’s international strategy, the Institute of Grocery Distribution predicts that by 2010 it expects Tesco’s global sales to reach nearly £63 billion, compared with £34 billion this year. Tesco is expected to have more than 4,350 stores, nearly half of which will be outside the UK, the report said.
When OPI+ enquired about the expansion of Tesco’s office products ranges overseas, the comment was once again: "We don’t comment on rumour and speculation."
In this case though, numbers may well speak louder than words.
