Tesco Direct website to close due to high fulfilment costs

In an announcement on 23 May, UK grocery giant Tesco has partly blamed high fulfilment costs for its decision to close down its non-food website Tesco Direct. After conducting a detail review of Tesco Direct, the firm concluded that – no matter how hard it tried – it would remain a small, loss-making part of the business. Therefore, Tesco Direct will cease trading on 9 July 2018. The retailer has blamed the lack of profit on the high costs of both fulfilment and online marketing.

The Tesco Direct website sells a range of general merchandise, including technology, homeware, clothing and toys for delivery or in-store collection. Rather than continuing the initiative as a standalone non-food business, Tesco will now be bringing its general merchandise offer into the Tesco.com main site in order to create a simpler online experience for shoppers. There will apparently be no other changes to the Tesco grocery home shopping service as a result of the announcement.

500 redundancies

“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,” said Charles Wilson, CEO of Tesco UK & ROI. The Tesco Direct online orders are handled at the company’s fulfilment centre at Fenny Lock, near to Milton Keynes in the UK. As a result of the termination of the website, the distribution centre is also likely to close, resulting in around 500 redundancies.