Tesco, Britain's biggest retailer, is to close its non-food website Tesco Direct, having concluded it could not make the loss-making business profitable.
The group said Tesco Direct will cease trading on July 9 and, as part of this, the intention is to close the distribution centre which handles the website's orders.
It said the decision means 500 workers across the business will be at risk of redundancy.
Single Platform
"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," commented Charles Wilson, CEO of Tesco UK & ROI.
"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 fulfilment centre for Tesco Direct is located at Fenny Lock in Milton Keynes.
'Decisive Action'
Commenting on the move, Clive Black, analyst with Shore Capital, said, "This is a clear signal that the company is taking decisive action and is the first demonstrable statement by Charles Wilson since he joined the group in early March as CEO of the UK and Republic of Ireland."
Elsewhere, Martin Lane of money.co.uk suggested that Amazon's continued expansion may have played a part in Tesco's decision.
"Yet another retailer has succumb to the pressure of retail giant Amazon," he said. "Tesco Direct shutting the home ware side of their business suggests not even key players are safe in the current climate - it's not just the high street suffering."
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
