Sir Philip Green to take on big four with BHS Food

BHS is poised to join the supermarket price war as it prepares to launch its first food outlet.

BHSstore-Location-2014_460

BHS is to start selling branded food products in stores later this month.

The retailer is set to trial the service in up to 150 stores in the coming months ahead of making it a permanent addition within 50 outlets by the end of 2014.

Stores will sell products from brands including Heinz, Nescafe and Coca-Cola rather than own-label, costing 10 per cent less than those sold in the big four supermarkets.

A spokeswoman for BHS says the pricing strategy aims to be ”competitive on convenience food offer” as its owner Arcadia Group looks to wrestle share away from the grocery sector’s more established players. Tesco, Sainsbury’s, Asda and Morrisons are seeing their market share dwindle as cash-strapped shoppers increasingly turn to discounters such as Aldi and Lidl.

Morrisons, which has suffered significant losses recently, has promised to dedicate £1bn to slashing prices over the next three years. Asda is also ramping up its price focus and has said future campaigns will build on its dual focus on price and quality.

It sees BHS return to selling food after it was acquired by Arcadia in 2000. Sir Philip Green first revealed plans to re-enter the grocery market last November.

BHS rival Marks and Spencer, which has recently begun to sell branded food products, has struggled to balance its quality food offering with clothing in recent years. The retailer’s annual sales are set to be surpassed by Next for the first time after the latter posted a 5.8 per cent jump in its latest results.

Readers' comments (4)

  • Surely a deep discounting strategy will not offset the challenge of having most of their shops in city centres (or very close to them). Being in town means there going to have to attract the convenience shopper. Being 10% less than the competitor is admirable, however, the main supermarkets put a 5%+ price increase (with the exception of ASDA) on their products in a convenience shop. The real money is to be had around capturing the weekly shop but city/town centre locations don't really offer easy access and free parking. It'll be interesting to see what they do...

    Unsuitable or offensive? Report this comment

  • I have always been a fan and admired businesses that to do something different and challenge the big brands. Unfortunately I dont think this will help BHS in anyway whatsoever, rather add more confusion as to the brand, the experience and the relationship with the customer really is.
    It doesn't mean that it can't be successful selling food again in store however competing with brand promotions and the logistical fact that most BHS stores are on a high street or centre that is not accessible by car will put many off - certainly purchasing any volume of goods worth BHS shouting about.
    BHS should try and focus on defining their brand, their customer base and their marketing strategy before pivoting to something so extreme. Entering this hugely competitive and complex market of food, from expiry dates, to shop refits to price wars I think BHS may be biting off more than they can chew.

    Unsuitable or offensive? Report this comment

  • If it wasn't Philip Green i'd say the idea was bonkers for the reasons Kimberley spells out above.

    Unsuitable or offensive? Report this comment

  • I'm guessing there is a bigger strategy here. Establishing management know how and supply expertise as a basis for a takeover of Sainsburys (maybe)

    Unsuitable or offensive? Report this comment

Have your say

Mandatory
Mandatory
Mandatory
Mandatory

Job of the Week

Top Jobs

social

+media Facebook Twitter LinkedIn
knowledge+bank