Tesco scraps used car venture
Wednesday 04 April 2012
Tesco has sent its second-hand car venture to the scrapyard - just a year after its launch.
The group said it had decided to impound Tesco Cars, a joint online venture with Carsite, after it failed to secure a decent supply of cars.
Tesco Cars aimed to advertise up to 3,000 cars a week when it was first launched in April last year but reports suggested that at the end of last year it was selling just 150 vehicles a month.
Tesco has also decided not to proceed with handyman business Tesco Home Services after a trial.
The closure comes at an uncertain time for the UK's biggest supermarket as chief executive Philip Clarke prepares to unveil his turnaround strategy following a shock profit warning, a share price slide and the departure of UK boss Richard Brasher.
Mr Clarke earlier this year admitted Christmas had been disappointing after its Big Price Drop campaign flopped, prompting a near £5 billion slump in its market value.
He plans to cram a three-year overhaul into the next 12 months, including a raft of initiatives dealing with online, price and home delivery.
A message announcing the closure of Tesco Cars, in which Tesco had a 25% stake, appeared on the website yesterday, apologising for any inconvenience caused.
The company added that it started the business "in good faith" but could no longer offer a "satisfactory range" of vehicles".
In a statement, Tesco said: "The customer response has been positive and shows the value of a trusted brand in this market, but securing a good supply of cars has been difficult and we would always want to deliver the best range for customers.
"Given time we would have overcome the challenge but at the moment it's right to focus on our core business."
Tesco launched the cars venture in a bid to expand outside its traditional supermarket offering, which includes financial services, pet insurance and film production.
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