Following reports that Tesco has bought Paperchase in a pre-package deal: Zoe Mills, lead retail analyst at GlobalData, a leading data and analytics company, offers her view on this news: “This acquisition will enable Tesco to enhance its non-food categories outside of homewares, however, bedding in the brand is unlikely to be smooth sailing. Paperchase’s target audience is younger than Tesco’s and it appeals to a more affluent shopper. While Tesco may be able to encourage existing Paperchase shoppers to its stores, persuading its existing customer base to trade up will be a challenge. Tesco must utilise its Clubcard prices to encourage spend and should also considering introducing a value range to ensure it does not alienate its existing customers.
“Having focused on developing its non-food range in its stores in 2022, this move to acquire Paperchase’s brand and intellectual property is somewhat of a pivot for the grocer. Indeed, not only is this a shift in focus away from developing its homewares range but it also marks a change in strategy for how the grocer incorporates more brands into its stores. Over the past few years, Tesco has partnered with the likes of AO and Homebase to develop its non-food offer, though it ultimately ended its partnership with AO in July 2022. With 2023 set to be challenging, if this acquisition proves successful, Tesco may have further opportunities to bring other complementary brands into the fold.”
