Tesco chief executive Sir Terry Leahy said he was pleased with
the launch of its nonfood Tesco Direct business, which after a
few IT hiccups went live last year carrying 8,000 products online
and 1,500 in the print catalogue. The latest Tesco Direct
catalogue, launched last month, offers 7,500 items, and 12,000
products are available online.
Tesco expects Direct to generate revenues of £150 million in
the current financial year; its start-up costs and initial
operating losses for the first half of the fiscal year were
“It’s hard to start these businesses from scratch, but [Tesco Direct is] very popular with customers,” Leahy said. “We’re improving the service all the time.” He dismissed rumours that problems with the business are resulting in some management changes. It has been reported that Laura Wade-Gery, currently heading up Tesco.com, will be promoted to chief executive of Tesco Direct, replacing Steve Robinson who recently left the company after two years.
Tesco.com delivered a 35 per cent sales growth in the 26 weeks to 25th August 2007, to £748 million. Profit, excluding Direct, was up 62 per cent, to £54.7 million. It is soon to start selling clothes online, with selected ranges earmarked for launch. This move is anticipated to spark a clothing price war as Tesco becomes the first supermarket to sell clothes via its website.