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Supermarket Sweep: Grocery Stores Grab More Apparel Market Share

A new bra is as likely to be on a consumer’s supermarket shopping list today as bread and milk.

That’s according to retail technology company Edited, which this week highlighted the growing strength of in-house apparel sold at grocery chains across the U.K., like Aldi and Sainsbury’s, which keep their clothing assortments as fresh as their produce.

Forget Ireland’s fast-fashion emporium, Primark: American retailers should wise up to the looming arrival of Lidl. The German supermarket chain plans to open its first U.S. location in 2018 and could present a significant threat to the likes of Target, Walmart and Kmart.

Case in point: earlier this year Lidl launched a 58-piece denim collection at its EU stores that included women’s boyfriend jeans for less than 8 pounds ($11.45). Comparable products in Walmart and Kmart were priced at $24.99 and $20 respectively.

Aldi, another German export, already has more than 1,500 stores in the U.S. and is targeting 2,000 locations by 2018. Its European stores occasionally carry clothing, but the ranges are small and only available until they sell out, like the men’s “luxury” pique polo shirts currently selling in the run-up to Father’s Day and priced at 12 euro (about $14).

“At supermarket chains across the U.K., own-brand apparel sales are booming,” Katie Smith, senior fashion and retail analyst at Edited, said. “Driven by a total commitment to functional-yet-relevant assortments that have elevated the product but—crucially—not the price, the likes of Asda’s George, Sainsbury’s Tu and Tesco’s F&F are headed for billions in annual apparel sales.”

For Sainsbury’s, its Tu brand recorded sales of more than 900 million pounds ($1.3 billion) in the last fiscal year, up 8.5% from the previous 12-month period, making it the sixth largest clothing retailer by volume in the U.K.

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“Style may be getting a louder voice in supermarket apparel, but price is still the almighty gavel,” Smith said, pointing out that F&F and Tu focus on the 8 to 10 pound ($11.50 to $14.50) price bracket, while George at Asda ranges between 4 and 6 pounds ($5.80 to $8.70).

In fact, Edited found that only 9.6% of the U.K. mass market has goods available for under 10 pounds ($14.50), compared to 55 percent at Tu, 58 percent at F&F and 72 percent at George.

“At supermarkets product needs to be useful and look good, but they also need to be an easily justified purchase, not a bank-breaking decision. Something customers can see, want and afford at the same time,” Smith continued. “Supermarket retailers know better than most what their customers want and when they want it.”

They’re also champions of constant newness; Edited pointed out that Tesco introduced nearly 9,000 new apparel products in the last six months. Not to mention, their assortments are all-encompassing.

“These retailers have all bases covered, wetsuits included. All three of the supermarket giants have ‘character shops’ that stock licensed clothing, sleepwear and costumes featuring Marvel characters, cartoon animals and Frozen everything,” Smith said. “All three retailers also give lingerie its own section on their websites. A wise choice considering it’s a market valued at $110 billion.”

In addition, Sainsbury’s stocks womenswear up to size 24 (about a U.S. 20), while Tesco and Asda have dedicated plus-size offerings, ranging up to 26 (22) and 32 (28) respectively. With that being said, Kmart and Walmart do offer a considerable size range in the U.S., with select womenswear available up to 3X (26-28).

British supermarkets also win on timing.

“Thanks to the large orders they place, all three retailers have a great selection of prints across womenswear and childrenswear. Trend-led, colorful and attention-grabbing garments that will steer your trolley away from the baked beans,” Smith said, noting that multi-packs offer great value at Asda, while denim is a hotly contested category in all three chains. “For a pair of women’s jeans, Asda average 14.86 pounds ($21.50), Sainsbury’s 16.94 pounds ($24.51) and Tesco 19.41 pounds ($28.09). It’s even closer in men’s and the difference comes down to pence for kids’ jeans, averaging around 7.50 pounds ($10.85) a pair.”

But while Tesco has the most on-trend offering, that also means more discounts: 30 percent of the store’s current offering is reduced by an average of 46 percent, Edited found. By comparison, Asda has cut prices on just 10 percent of its offering and Sainsbury’s on 6.5%.

“It’s clear from the data that the three biggest supermarket retailers are not only fast, price-driven and trend-savvy, but they’re successful too,” Smith said, warning that anyone entering the space–in the U.K., at least–will have their work cut out for them.