Tesco has announced that it will completely close its Tesco Direct operation including the Fenny Lock fulfilment centre which handles its online non-grocery orders. Instead it says it will extend the lines it offers on its primary home delivery site and, presumably, deliver these lines along with customers’ grocery shopping. There are some 500 jobs associated with Tesco Direct and the move may well result in some redundancies.
The business has stated that the high costs for fulfilment and online marketing had prevented Tesco Direct from developing into a sustainable standalone non-food business.
Tesco UK&ROI CEO Charles Wilson said: “We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we’e focusing our investment into one online platform.” Adding: “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.”
The move has surprised many in the sector as, currently, there is an increasing number of retailers extending the product ranges they offer via their own marketplace sites and who are leveraging the advantages of direct despatch or drop shipping from suppliers in response to orders, rather than investing in and warehousing the products themselves.
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