May 22, 2018
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Tesco to close Direct non-food e-store, consolidate online ops at Tesco.com

May 22, 2018

In a shock announcement on Tuesday, Tesco said it is to close its Tesco Direct non-food webstore, which sells clothing, homewares, furniture, electricals, toys, gardening, flowers, health & beauty and gifts. The decision comes after conducting a detailed review of the lossmaking business.

Tesco is consolidating and refining its e-commerce offer

The company said that it has "concluded that, despite its best efforts, there is no route to profitability for this small part of the business.”

While this may come as a surprise in a retail sector that is focusing ever more heavily on internet sales, its doesn't mean the company is retreating from e-commerce, as it also operates Tesco.com and will maintain, and focus on, this business as it extracts itself from the anomaly of operating two separate webstores. 

The firm said that “Tesco Direct 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.”

It will close on July 9 and the company said that the fulfilment centre at Fenny Lock, which handles Tesco Direct orders, is also to shut.

But the supermarkets giant, which sells the own brand F&F Fashion line, stressed that it "remains committed to bringing a compelling range of general merchandise to its customers, both in-store and online at the Tesco.com webstore.

“It is Tesco’s ambition to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place,” it said.

The company has already beefed up the product assortment on the surviving webstore with shoppers also able to buy products such as toys, home and cookware there. But it seems that the offer available in future is likely to be smaller than what was available on Tesco Direct, both in terms of categories covered and merchandise selection. 

The closure of the Direct operation will mean around 500 staff will be at risk of redundancy across the business.

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