Tesco’s new UK CEO Charles Wilson has announced the closure of its Tesco Direct non-food website, with 500 jobs being put at risk.
Wilson said a detailed review of the website had concluded it would be more practical to close the business, in the wake of rising costs for online fulfilment, with no prospect of the loss-making concern becoming profitable.
Tesco Direct will cease trading on 9 July, including the closure the fulfilment centre at Fenny Lock, near Milton Keynes, which handles Tesco Direct orders.
The supermarket said it remained committed to bringing a “compelling” range of general merchandise at Tesco.com, but that it wanted to create a simpler online experience for customers.
Customers can already buy products such as toys, home and cookware. Opportunities to selectively build on this offer will be made as investment is focused on Tesco.com and the company said it would be “selectively” building on the range.
Tesco said it would do all it could to support the 500 colleagues at risk of redundancy and external partners affected by this change.
In a message to customers apologising for the closure, Tesco also warned of delays of up to five days on deliveries, as it winds down the operation.
“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,” said Wilson.
“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.”
Joanne McGuinness, Usdaw national officer, said: “This is devastating news for Tesco Direct staff. Usdaw officials and senior reps will now enter into consultation talks with the company where we will look closely at the business case for the proposed closure. Our priorities will be to support, advise and represent our members through this difficult period, and to get the best possible deal for them.”