How does Habitat’s relaunch benefit Sainsbury’s?

Sainsbury’s relaunched Habitat in both its supermarkets and online last week as part of a brand overhaul. The new Habitat range will be offering more affordable homeware. Habitat's integration into the Sainsbury's group comes at a convenient time for the grocer as people took more trips to supermarkets. Retail Gazette discovers what this means for Sainsbury's.

Sainsbury’s Habitat
Habitat first went into liquidation in 2011 when it had to close all its stores

Habitat is recognised as the main homewares brand within the Sainsbury’s Group – which also owns Argos.

The homewares brand boasts itself on “improving shopping experience” with the added Argos benefits of better delivery and collection options.

Habitat first went into liquidation in 2011 when it had to close all its stores, and eventually it was sold to Home Retail Group.

Sainsbury’s swooped in on Habitat in 2016 after it bought Home Retail Group, including Argos and Habitat, for £1.4 billion.

Since being founded in 1964, Habitat expanded quickly in the UK and internationally with the first overseas store opening in 1973 in Paris.

As a result of being part of the wider Sainsbury’s group, customers can purchase a wide range of Habitat products from Argos stores or online.

Last year, Sainsbury’s announced that it wanted to have 80 per cent of homewares and furniture sold within the Sainsbury’s group under the Habitat brand by the end of 2021.

Sainsbury’s confirmed in May that as part of its integration of Habitat into its sister chain Argos, the trade, assets and liabilities of Habitat Retail Limited had been transferred to Argos Limited in February.

Sainsbury’s Habitat
Big 4 grocer Sainsbury’s swooped in on Habitat in 2016

Sainsbury’s is also setting its sights on the £400 million children’s furniture market with the launch of Habitat Kids, the brand’s first ever comprehensive furniture range designed and crafted specifically for children.

Sainsbury’s relaunched Habitat in both its supermarkets and online last week as part of a brand overhaul.

The overhaul comes as Habitat has evidently been struggling, leading to various store closures including its Tottenham Court Road flagship in London – leaving it with 11 concessions in supermarkets and three furniture showrooms.

Habitat’s integration into the Sainsbury’s group came at a convenient time for the grocer as people took more trips to supermarkets during Covid-19 restrictions.

The Habitat range will be expanding, offering more affordable homeware like cushions, vases and crockery, as well as larger pieces of furniture.

The new range correlates with John Lewis’ Anyday launch back in April. Its Anyday brand consists of an affordable range of homewares, technology, baby care and baby clothing.

The department store chain said Anyday was its “most affordable” own-label brand yet. It said prices, on average, were 20 per cent lower compared to existing own-brand prices, while some are 40 per cent cheaper.

Sainsbury’s Habitat
Since being founded in 1964, Habitat expanded quickly in the UK

Sainsbury’s chief executive, Simon Roberts said Habitat is “an important focus for us”.

“Putting food back at the heart of Sainsbury’s only works if our other brands deliver in their own right,” he said.

“It’s an iconic British brand that has been helping customers transform their homes for almost 60 years and the new campaign will ensure it becomes more accessible and affordable for everyone.”

Rick Harris, director of money-saving website, Offer Of The Day, said Habitat has become a major player in the home furnishing industry.

“It’s such a household name that the closing of stores is a loss that a lot of people will feel, as it limits where people are going to be able to go for their homeware needs,” he told Retail Gazette.

“Sainsbury’s taking the Habitat brand under its wing is an incredibly smart move as it allows Habitat products to still be readily available to a huge audience that are already going to Sainsbury’s stores, and will allow Sainsbury’s to tap into a whole new stream of revenue.

“Sainsbury’s relaunching Habitat has come at the best possible time as people’s interest has shifted towards home improvement becoming a bigger priority, so it has the potential to be a fantastic asset to Sainsbury’s.

“Since the start of the pandemic, as a society we’ve become more focused on making our houses into homes, and we’ve started taking home improvement much more seriously.

“Any brand that then decides to take advantage of the shift in our interests is definitely making the right move as it can greatly benefit their business.

“Sainsbury’s taking on and pushing Habitat is allowing them to branch into a whole new kind of consumer appeal that will inevitably lead to more income.”

“Sainsbury’s relaunching Habitat comes at the best possible time as people’s interests shift”

However, retail expert Nelson Blackley argued that the Habitat brand has all but disappeared from public consciousness over the past twenty years and so this move by Sainsbury’s could both introduce the brand to younger shoppers and reintroduce the brand to the older baby boomer generation.

“This could help Habitat reach some of the ambitious revenue targets set by Sainsbury’s for the brand by 2025,” he said.

“I don’t see this move as taking the Habitat brand ‘downmarket’ or damaging for the Habitat brand, as there is considerable overlap between what were traditional Habitat consumers in the past and the current Sainsbury’s shopper demographic.

“As people have learned to stay at home during the pandemic, it likely that they continue to spend in products and services that help make their homes pleasurable places to work, relax and socialise.

“So, this move by Sainsbury’s is well timed not only because of the positive market trends but also represents a competitive response to the recent success of specialist housewares retailers such as Dunelm.

“It will also combat the impact of the launch by John Lewis of their ‘thoughtfully-designed’ own brand ‘Anyday’ range, which is heavily focused on housewares.

“It might provide Sainsbury’s with a competitive edge in the fast-growing homewares market, as well as provide higher margin opportunities to fill surplus grocery store space.”

Meanwhile, Catherine Shuttleworth, chief executive and founder of retail agency Savvy, explained that using the brand is a smart move by Sainsbury it has a “cool” heritage vibe and enables Sainsbury to extend their home offering to a broader demographic of younger shoppers.

“The rise in rented accommodation for younger shoppers means they have available cash to spend on homewares to allow them to make their mark on their flats and houses and Habitat is an accessible and affordable way of creating a lifestyle,” she told Retail Gazette.

“This move further underlines Sainsburys proposition in food and home and helps to creator a point of difference between themselves and their competitors.

“It creates a connection to the Sainsburys brand and a reason for shoppers to visit all areas of the store not just food.”

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