There are three clear front runners among the grocers for homewares: Asda, Tesco and Sainsbury’s – in that order. But as Asda hits a long-time-coming identity crisis, and Tesco refocuses the business towards its core food offer, Sainsbury’s could be the dark horse in gaining grocery share of the homewares market.

Asda struggles in the face of competition

Asda’s homewares have historically been the most popular with consumers, driven largely by the supermarket’s design-led and affordable George range. However, value grocer Asda has recently reported its tenth quarter of negative like-for-like sales as it struggles to differentiate itself from discount competitors Aldi and Lidl; and the grocer’s fate is now under scrutiny.

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Percentage of homewares shoppers shopping at the leading supermarkets.
Source: GlobalData How Britain Shops survey 2015 and 2016 of 10,000 consumers

Tesco, meanwhile, is concentrating on its supermarket operations – selling coffee shop and restaurant chains Harris & Hoole and Giraffe in 2016 – and dedicating less store space to non-food items. So it is unlikely that Tesco will innovate across its homewares ranges in the medium term.

Sainsbury’s to excel in homewares with arrival of Argos and Habitat

And that leaves Sainsbury’s, which acquired Home Retail Group (HRG) at the end of 2016 and is integrating mini stores of HRG retailers Argos and Habitat into its own stores. Sainsbury’s has seen the greatest increase in homewares as a share of total sales compared with other leading grocers in the last 10 years – and now this is only set to grow.

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The homewares ranges in the mini Habitats are intended to complement Sainsbury’s own homewares ranges, not encroach on them. Assuming this is the case, the arrival of Habitat is good news for Sainsbury’s homewares; not only will it force Sainsbury’s to up its own design credentials in homewares, but it will also broaden Sainsbury’s customer base – attracting younger and more affluent consumers.

Sainsbury’s current customer profile for homewares, 2015 vs 2016
Source: GlobalData How Britain Shops survey 2015 and 2016 of 10,000 consumers

Sainsbury’s does have a clear opportunity in homewares in the medium to long term. However, during what will be a challenging year for homewares in 2017, the grocer may only start to see the fruits of its labour once the economic environment settles. Until then, Sainsbury’s, along with the other grocers, will be losing out to discounters B&M and The Range.