Tesco Revs Up Food Delivery As It Takes Market Share From Rivals

Tesco's internet delivery service has grown market share this years and commands almost 50 per cent of the market.

The supermarket giant increased its market share by by 2.4 per cent in the first 19 weeks of the year according to Kantar data. Asda and Ocado both lost a 0.6 per cent share of the growing market and Sainsbury's lost 1.1 per cent.

Waitrose's share was unchanged, according to the data reported in the Sunday Times. Only Asda and Tesco claim to have profitable operations, the newspaper said.

The online food delivery market was worth £5.6 billion last year but is predicted to double by 2018.

Bryan Roberts of Kantar told the Sunday Times: 'You are charging shoppers £5 [for delivery] and it costs you almost £20 per delivery so you've got to have a very big basket size to generate the profit to cover the cost.'

However, Tesco, whose UK sales fell 1 per cent in the three months to June, has struggled to sell non-grocery products to customers over the internet amid growing competition from online retailers such as Amazon.

It is is poised to introduce a new out-of-town format this week with the launch of its Watford store which includes a Euphorium Bakery, a standalone F+F clothing department, a Giraffe restaurant and a Harris+Hoole coffee shop.

It is also launching its full F+F range in a 5,000 sq ft store in its Kensignton superstore in October, according to the FT today.