The supermarket chain said that following a review, it has decided that ‘despite our best efforts, there is no route to profitability for this small, loss-making part of the business’.
Tesco Direct sells a range of general merchandise, including homeware, technology, clothing and toys, for delivery or collection.
The grocer said: ‘Tesco Direct has faced a number of significant challenges, including high costs for fulfilment and online marketing, which have prevented it from delivering a sustainable offer as a standalone non-food business.’
Tesco Direct will cease trading on July 9 and the fulfilment centre at Fenny Lock in Milton Keynes which handles Tesco Direct orders will close.
Tesco said it ‘remains committed to bringing a compelling range of general merchandise to customers, both in-store and online at Tesco.com’, adding that its ambition is to ‘create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.
‘We began this process a little while ago and customers shopping on [Tesco’s grocery home shopping service] Tesco.com 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 a single online platform.’
Charles Wilson, ceo of Tesco UK & ROI, commented: “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.
“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.”
Tesco.com serves on average 100,000 customers daily.