Tesco, Britain’s largest retailer, plans to hasten its shift towards the digital world by ramping up investment online that includes massive cuts in online delivery and remote shopping charges.
The supermarket's bosses said they would cut the cost of buying groceries online in an effort to make a 'seamless' experience for its shoppers. 'click and collect' to nothing from current charges of £2 to £3 and launch 'market leading' delivery charges later this year.
The supermarket has warned that the cost of providing additional services and the additional capital set aside to shore the company up against the growing uncertainty of the direction of the consumer meant expenditure on stores would be reduced to less than half historic levels.
Chief executive Philip Clarke said: 'We are announcing the acceleration of our plan with the objective of becoming the multichannel leader in the UK.'
Clarke said: 'We think we need more stability. But it will take us a while to reach this new position because we have got to take customer with us.'
In what was seen as a further retrenchment away from relaying on its giant hypermarkets, Tesco will offer free Click & Collect for groceries later this year - from current charges of £2 to £3 - and will double the number of sites offering the service from the current 230.
Tesco’s multichannel Robin Terrell said: 'One of the great myths of home delivery is that it is universally convenient - but it is only convenient if you're at home. Customers love Click & Collect and we already offer more Click and Collect points than any other retailer.'
He continued: 'Customers tell us that delivery charges are the biggest barrier to online delivery, so what we plan to do is take a leadership position on the cost of delivery.'
He said free Click & Collect would be twinned with 'market-leading delivery pricing'.
He also said the online general merchandise business Tesco Direct had 'stabilised' - after a long period of stagnation and loss - and that Tesco had improved the level of 'customer satisfaction' at the division.
Meanwhile, Tesco also has big plans for its F&F clothing business online that will see a raft of dedicated foreign language sites.
It is also planning to deliver food and general merchandise in one house time slots.
Group finance director Laurie McIlwee said: 'One way of looking at this is that we are meeting customers additional needs and that means we are adding additional costs and a service charge which we can’t easily pass on to them. But the retailer who can best meet those customer needs across a wide variety of channels will be well rewarded indeed.'
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