Tesco pulls ahead of the pack in growth of Net grocery shopping

Tesco's online grocery service will expand to cover nearly all of the country by the end of August, after the supermarket group speeded up its roll-out programme. The new target date is four months earlier than the previous deadline of December.

Tesco's online grocery service will expand to cover nearly all of the country by the end of August, after the supermarket group speeded up its roll-out programme. The new target date is four months earlier than the previous deadline of December.

Tesco is now looking to export online grocery shopping to South Korea. It has two stores there at the moment but a further five will open by the end of September.

"It is a great opportunity because of the density of housing and high internet penetration," says John Barratt, Tesco.com's managing director. "We would like to launch there some time next year." The service is also due for launch in the Republic of Ireland.

In the UK the online service currently has 48,000 customers and sales of £4m a week. That gives annualised sales of £200m with a £300m target for the end of the year. Tesco says 240 of its stores will offer the service by the end of August. It is being backed by a national television campaign starring Prunella Scales and Jane Horrocks which started last week.

Tesco's acceleration puts it further ahead of arch-rival J Sainsbury. Sainsbury's is aiming to cover 60 per cent of the country by next March with its re-named Sainsburystoyou service. Its first delivery depot opened in Park Royal, north west London, a few weeks ago and is thought to be trading well.

Under new chief executive, Sir Peter Davis, the company is looking to catch up with Tesco by offering the service out of stores as well as expensive purpose-built depots. It will also open intermediary warehouses on industrial estates to reduce delivery times.

Separately, new figures from the Institute of Grocery Distribution show that Tesco is stretching its lead over Sainsbury's. The IGD's market share figures for the 12 months to December 1999 reveal that Tesco's share of the UK grocery market grew from 15.2 per cent to 15.6 per cent.

Sainsbury's share dipped from 12.2 per cent to 11.8 per cent in the same period. Asda showed strong gains in the early stages of its ownership by Wal-Mart with its share rising from 8.5 to 8.9 per cent. Safeway dipped slightly from 7.6 per cent to 7.4 per cent though the figure pre-dates the promotion-led sales drive inspired by new chief executive Carlos Criado-Perez.