Operating Review

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Complementary non-food

Food remains at the heart of our offer, but we also set a target for complementary non-food to deliver £700 million of our £2.5 billion sales growth target. Over the last 18 months new layouts, fixtures, fittings and ranges have been trialled in 15 stores to assess which non-food products and which types of presentation most appeal to our customers. The successful elements have been introduced into 48 stores and in those being refurbished and extended. We will keep making improvements and applying new ideas in this area. The addition of sales space through both new store development and extensions is playing an important role as we accelerate the growth of these ranges.

As we continue to build our infrastructure and capability in non-food we opened offices in Hong Kong and Poland in 2005 to help us work directly with manufacturers in the development of higher quality better value products. Our reputation for quality, value and innovation is just as relevant to our non-food ranges as it is to food. In ‘branded’ areas such as music and entertainment we focus on offering products at competitive prices and we have gained significant market shares of recent DVD and CD releases. In clothing and home ranges, innovation, design and value are all important to customers. In March 2007 we introduced a new premium homeware range under the ‘Different by design’ brand, which mirrors our premium ‘Taste the difference’ food offer.

TU, our own label clothing range, continues to be a star performer and underpins our non-food offer. In March 2006 we launched a range of clothing made from Fairtrade certified cotton. The range consists of 22 different styles across men’s, women’s and children’s clothing and is designed by our own design team as part of our TU clothing collection.