Owen Gibson 

Tesco.com bags up first profit

10am: Tesco.com has turned in its first profit as more than 1 million Britons say goodbye to the trauma of supermarket trips and opt for the convenience of the online grocery store. By Owen Gibson.
  
  


Tesco.com, the supermarket giant's home shopping service, has turned in its first profit as more than 1 million Britons say goodbye to the trauma of supermarket trips and opt for the convenience of the online grocery store.

The home shopping operation, symbolised by the fleet of new breed of Tesco delivery "vanettes" up and down the country, is now making almost £1m a day.

It joins online bank Egg.com and online retailer Amazon among the few sites that have prospered in the wake of the dotcom crash.

Sales have leapt more than 50% in the last year, now standing at £356m, and the service has expanded to four countries.

In the UK the service has over 1m registered users and generates over 85,000 orders per week, vindicating Tesco's decision to invest in its internet shopping service when others remained sceptical.

Although the service, which allows customers to order groceries through the web and have them delivered at a specified time, has moved into an operating profit, the figures exclude start-up costs associated with the US operation.

The US site is a joint venture with Safeway, where Tesco lent its expertise and technology to relaunch failed venture Groceryworks.com, investing £15m in return for a 35% stake.

While other rival supermarkets, including Sainsbury, Asda and Iceland, continue to operate home shopping services, none has been as successful as Tesco, which dominates with over half of the market.

Tesco has succeeded by following the old family grocer's route of employing extra staff to pick objects from the shelves of existing stores, rather than building expensive warehouses and distribution systems.

Rivals which followed the latter approach have changed tack after enviously watching the success of Tesco's model.

However, the new Waitrose-backed service Ocado, available only in Hertfordshire, has persisted with a warehousing service.

 

Leave a Comment

Required fields are marked *

*

*