UK: Tesco is to close its loss-making non-food website Tesco Direct.
Following a detailed review Tesco says it has concluded that, despite its best efforts, there is no route to profitability for this small part of its business, which was launched in 2006 to take on Argos and Amazon.
The retailer says that its Tesco Direct business 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 July 9 with approximately 500 redundancies across the business.
Tesco says it remains committed to offering a range of general merchandise to its customers, both in-store and online at tesco.com, and wants to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.
“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,” said Tesco CEO Charles Wilson.
“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,” he added.