Sainsbury's - Habitat rolling in

13 May 2021

More on Sainsbury's today as we review their work to grow Habitat beyond the realms of smaller 'store in store' implants whilst being a reasonably niche brand.

The challenge for JS was always going to be the Argos own label, which is functional but never works on shelf, in a Sainsbury's, given that the brand doesn't really equate to quality and Argos is known for many things, but own label non food lines? Less so.

Efforts to combine the two have been clumsy in recent years; Selly Oak store in Birmingham (very much their flagship offering with food court) featured Argos branded lines next to Sainsbury's branded lines (and Habitat) in the same category, sometimes the same product almost with a marginal price gap.

Confusing? For sure!

Especially when the Argos store itself sat mere metres away....

Added to that, Habitat also existed within the wider non-food category but it struggled, mainly because the display kit was relatively high and thus, ran in to the same issues that Tesco had.

Over spaced stores with standard kit used to display higher priced non-food items. It doesn't really work, especially Habitat product which sold in a main store like this, alongside other products just didn't give it the halo that it warranted.

Shop in shop stores were developed too, alas many ended up being mere clearance houses with ample discounts and no customers visiting. Many of these have now closed with the former space taken up by Habitat ranges in the core aisles.

This new model is better as the Habitat range is given more room to breathe within the core aisles, however in some stores, newer ones that have a myriad of display kit types going all over the space... It can be harder to shop as a customer....

Nonetheless, it's clear that Habitat is a core part of the Sainsbury's strategy moving forwards and their expansion of range in to core stores is a clear sign of that.

The former Habitat space in one store, now taken up by large fixtures featuring all manner of bedding, some Habitat lives here notably.

But the main issues does remain, in that some stores are over spaced. Even where they already feature an Argos.

The loss of food counters does little to alleviate this (IE removing counters and putting Argos in isn't an option everywhere, as a fair few shops already feature Argos).

Yet the merchandising can leave a fair amount to be desired, the kit isn't always helpful when displaying higher priced cushions for example.

But how to square the circle? The shop in shop idea clearly hasn't worked as c.9 (from 13) have closed) so allowing it in to the core range to 'breathe' is vital.

But the whole picture needs stitching together.

The challenge remains in that Argos as a brand doesn't have equity in non-food as a private label, even within Argos (direct from store to customer apart).

Habitat does have equity but trading via Argos (as they are doing so now, with a fair old range online) is one idea and they'll hope that Habitat customers will find it there, but is a core Argos customer, a Habitat customer(?)

Probably not.

Another challenge is that the Sainsbury's "Home" range is so strong, some products above are both Habitat and Sainsbury's Home, but that is perhaps the point...

Non-Food is one area where the focus on quality, product and selling something that is representative of the historic values that Sainsbury's are about, hasn't wavered at all.

It's a strong brand and identity with ever rotating collections and product; it stands out well and works well whenever one visits the store. Habitat is great, but it's arguably solving a problem that Sainsbury's just doesn't have to solve.

All eyes on Paula Nickolds and how she manages to square this circle, alongside clothing, which remains a category that never really feels as though they're on top of. Online certainly is lagging and the trading of garments via Argos is another big question that will need customers to overcome serious hurdles.

Can see it being a distress purchase, IE school clothing at the last minute, or a planned purchase of a dress, or new work clothes.

But not at the same time as collecting a lawnmower.....

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From the Grocery Insight newsletter archive, first sent to subscribers on 13 May 2021. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.