Next trials in-store concession at Tesco branch
Next and Tesco have both had their challenges in recent periods and now the two are working together with Next testing out a concession in a Tesco superstore in London.
The 4,300 sq ft Next concession has opened in the Surrey Quays branch of Tesco Extra and offers an edited selection of basic women’s and menswear. Recovering Tesco has been working hard to boost footfall to its supermarkets and to maximise the revenue it can generate from spare space in its giant stores. That has seen it linking up with Arcadia to open concessions for chain such as Dorothy Perkins, Burton, Evans and Wallis, as well as with health and beauty retailer Holland & Barrett and electricals chain Dixons Carphone. Now the Next deal, if it’s a success and can be expanded, potentially brings one of Britain’s biggest fashion and interiors retailers into its orbit. The move is part of the process of UK retailers looking at their store portfolios and maximising their efficiencies. For Tesco, as mentioned, the appeal is clearly to make good use of spare space and generate rental revenue, as well as boosting its appeal to fashion shoppers. For Next, it helps expand its physical presence at lower cost than opening a standalone store and allows it to put bestsellers right in front of supermarket shoppers, all at a time when revenue at its own stores is falling. The supermarkets have been massive disrupters in the UK fashion sector, grabbing market share from more traditional fashion vendors. But now their strength is being used to boost specialist chains in fashion, beauty, interiors and other sectors. Major Tesco rival Asda has rented space to sports chain Decathlon and hairdressing chain Supercuts. Meanwhile another rival, Sainsbury’s has also maximised space profitability by adding Argos collection desks or full concessions in its supermarkets as well as mini-Habitat stores in its larger locations. In Sainsbury’s case, it owns both the Argos and Habitat brands, but it has also linked with external businesses including shoe specialist Clarks, plus Specsavers and Starbucks.