Terry Macalister 

Dot.com dominance

Tesco likes to do things in a big way. Britain's largest grocer, it has also grabbed the top spot in cyberspace. Yesterday it claimed 750,000 registered customers and the strongest penetration in the world through 90% coverage of the British market.
  
  


Tesco likes to do things in a big way. Britain's largest grocer, it has also grabbed the top spot in cyberspace. Yesterday it claimed 750,000 registered customers and the strongest penetration in the world through 90% coverage of the British market.

Orders taken by Tesco.com are running at 60,000 per week which brings in sales worth £5m every seven days. Like-for-like growth is up 100% in the first six months of this year with demand escalating strongly since the creation of the website in April.

In Britain 300 of the 759 Tesco stores offer dot.com deliveries, mainly food but increasingly other goods including books, CDs and mobile phones. Personal finance products are sold on the web, too.

Tesco also has an arrangement with Grattans for mail order sales and has agreed a joint venture with i-Village the women's internet site.

While rival food retailers such as Sainsbury have been struggling to find the right formula for online sales, analysts believe Tesco benefited from six years of home shopping experience. Sainsbury, under new chief executive Sir Peter Davis, is aiming to cover 60% of the country by next March through the relaunch of "Sainburystoyou".

Tesco based its dot.com operation on a store-by-store basis rather than dedicated distribution centres. These proved difficult for Sainsbury which is now using depots and local stores.

Tesco claims its success is based around a sophisticated computer model which ensures the supply chain works smoothly. David Reid, deputy chairman, says half the online turnover is from new customers; the rest from existing customers spending more. Next up is to follow up aggressive physical expansion worldwide with a rollout of its online services, starting in Dublin.

 

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