Tesco is to close its Tesco Direct, its non-food web site, saying that high fulfilment and online marketing costs had prevented it from delivering a sustainable offer as a standalone business.
It will cease trading on 9th July, and the Fenny Lock fulfilment centre, which handles the orders, is due to close as a result of the move.
Tesco Direct sells a range of general merchandise, including technology, homeware, clothing and toys for delivery or collection. The retailer said that it had been reviewing the Tesco Direct business and concluded that, “despite its best efforts, there is no route to profitability for this small, loss-making part of the business”.
Some 500 employees will be at risk of redundancy as a result of closure.
Tesco said it aims to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.
Tesco chief executive 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 are focusing our investment into one online platform.
“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.”