Tesco has conducted a detailed review of Tesco Direct, its non-food website, and has concluded that, despite its best efforts, there is no route to profitability for this small, loss-making part of the business.
Tesco Direct has faced a number of significant challenges, including high costs for fulfilment and online marketing, which have prevented it from delivering a sustainable offer as a standalone non-food business.
Tesco Direct will cease trading on 9 July 2018 and, as part of this, the intention is to close the fulfilment centre at Fenny Lock which handles Tesco Direct orders.
Tesco remains committed to bringing a compelling range of general merchandise to its customers, both in-store and online at Tesco.com. It is Tesco’s ambition to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.
Tesco began this process a little while ago and customers shopping on Tesco.com can already buy products such as toys, home and cookware. Opportunities to selectively build on this offer will be made as investment is focused on a single online platform. There are no other changes to the Tesco grocery home shopping service as a result of this announcement.
Approximately 500 colleagues will be at risk of redundancy across the business and the priority is to support colleagues, and external partners, that will be affected by this change.
Charles Wilson, CEO of Tesco UK & ROI, said:
“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.
“This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future.”