Sainsbury plans to expand product range on Web site

J Sainsbury Plc, the U.K. s third- largest supermarket owner, plans to expand non-food products such as electronics, entertainment and sports equipment on its Web site and won t add clothing for now.

There are plenty of areas with the potential to expand online, Luke Jensen, managing director of non-food, said in a telephone interview yesterday. Its Tu clothing line, sold in stores, is not an online priority because other categories offer better profits, he said.

London-based Sainsbury reported non-food revenue rose at four times the pace of food sales in the third quarter and sees that very much continuing, Jensen said. The retailer began offering non-food items on its Web site in July, lagging behind competitors including market leader Tesco Plc, which had started selling them three years earlier. Tesco, based in Cheshunt, began selling clothes online in October.

They re taking the low-hanging fruit first, Nick Coulter, an analyst at Numis Securities, said in a telephone interview. It s a sensible move and a measured progression. I wouldn t rule clothing out in a few years. He recommends that investors hold the stock.

Online retail sales will climb 12 percent in the U.K. this year, compared with a 1.7 percent increase for overall retail sales, according to research by Kelkoo, an online price- comparison Web site.

Jenson says he sees significant growth for non-food items at its new large-format, 80,000-square-foot stores, which will have around 30,000 square feet of space dedicated to its electronics, housewares, clothing and other non-food products. Extensions to existing outlets and store re-formats also will drive growth, he said.

Opportunities exist in extending Sainsbury s range of clothing, particularly lingerie, kidswear and menswear, Jensen said.

We may create some more brands, but that s not on the agenda today, he said.

The retailer has 8,000 non-food products on its Web site.