Tesco offers Internet shopping

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Tesco has launched a home shopping trial on the Internet in an attempt to attract shoppers who are too busy to visit their local supermarket. Tesco Direct started the service in the Ealing area of West London last week and will extend it to other areas if it is successful.

The service offers 20,000 product lines, a similar number to a full- sized supermarket. The goods are available at supermarket prices, though customers pay pounds 5 for delivery.

Customers must be members of Tesco's ClubCard scheme and can order their groceries through the CompuServe Internet access provider. They can also order by phone or fax. Orders are delivered the following day.

"I don't think it will appeal to everybody. It depends how much people value their time," said Paul Arnold, business consultant for Tesco Direct.

Tesco's move into home delivery is the most significant yet by one of the big supermarkets. Sainsbury's has links with Flanagan's, a south London company which offers a Supermarket Direct service on a limited number of lines. Safeway is considering following Tesco and Sainsbury on to the Internet to offer flowers and wine. But Tesco is the first UK supermarket group to offer a full range of groceries on-line.

Forecasts by Andersen Consulting show that home delivery could soon account for around 20 per cent of UK grocery shopping. Some experts say the supermarket giants could lose their market dominance to smaller operators or branded manufacturers who may be able to offer lower prices as they do not have the additional costs of an expensive store portfolio and large wage bills. They say the superstores over-estimate customer loyalty and the way shoppers feel about the trip.

The supermarkets have been dismissive about these threats but are monitoring the market. They say customers enjoy visiting the supermarket and would be unhappy about someone else selecting their tomatoes or bananas. Tesco shoppers can include comments on how ripe they would like their fruit, or substitutes if items are not available.

Richard Perks, of retail consultants Verdict Research, is unconvinced that home delivery will become a mainstream business. "I'm sceptical about it becoming a major part of the grocery market, though I can see that it would be attractive for busy professionals."