Tesco trials new home shopping hub concept

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Tesco is trialling a grocery home shopping hub concept at its Mansfield Tesco Extra store, using the large store capacity to fulfil a greater proportion of grocery home shopping orders, including picking some lines directly from its store warehouse.

The retailer revealed the trial in its annual results and said it has plans for a further three similar trials in 2014/15.

It said that strong growth in home shopping meant that it now had more than 200,000 delivery saver subscribers and over 260 Click & Collect locations – including trials at six London tube stations.

“We are planning to launch around 50 non-store collection points in 2014/15, as well as adding the service to another 100 stores.”

The automation of ‘goods to person’ at the new Erith facility was enabling it to pick products almost three times faster than in its stores – an improvement on the Crawley and Enfield dot-com-only stores.

It has also been fine-tuning the design of its home shopping vans. “Our new home shopping vans will be multi-category enabling us to fulfil general merchandise orders and will feature collapsible racking to carry larger items from our new general merchandise range,” it said.

Tesco’s UK online grocery business grew 11 per cent in the year to 22nd February, and it has now launched grocery home shopping in five countries.

However, this was the bright spot for a year in which tough trading conditions meant that the group’s total trading profit was down six per cent to £3.3 billion. Sales were up just 0.3 per cent to £71 billion.

Chief executive Philip Clarke said: “Having strengthened the foundations of our business in the UK, we are now accelerating our growth in new channels and investing in sharper prices, improved quality, stronger ranges and better service.

“Since setting out these plans just seven weeks ago, we have already made a substantial investment in price, launched Clubcard Fuel Save and re-launched our general merchandise ranges across the business. We are going faster with our work to transform our Extra stores to create more compelling destinations and will complete more than 50 in the first half alone.”

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