Bloomberg News

Tesco to Triple U.K. Grocery Collection Points Amid Online Boom

June 27, 2012

Tesco Plc (TSCO), the biggest U.K. grocer, plans to triple the number of drive-through grocery collection points this year to win shoppers who prefer the convenience of picking up online orders to waiting at home for a delivery.

The retailer is “fast accelerating” its Click & Collect service and will have 150 of the drive-through pods in parking lots by the end of the year, Ken Towle, Tesco’s director of Internet retailing, said in an interview. The number of collection points for non-food goods will also increase, rising to 1,000 by the end of the summer from 774 in April, he said.

“We’ve got something customers really like with Click & Collect,” Towle said. “It’s super-easy for customers, they just drive up, open their boot, put it in and away they go,” he said, using the British word for car trunk.

Tesco has vowed to spend 1 billion pounds ($1.6 billion) bolstering its online business, adding staff, and refreshing its stores and products to arrest declines in its domestic market. Online sales are the fastest-growing U.K. grocery channel, with sales expected to reach 9.9 billion pounds by 2015, 68 percent more than now, the Institute of Grocery Distribution says.

Grocery collection points have been more difficult to roll out because orders are typically for 60 to 75 items that need different temperature zones to account for frozen and chilled items, Towle said. Non-food collection points are for one or two smaller items such as a DVD or an item from the F&F clothing line, he said.

The service costs 2 pounds for a 2-hour time slot and is available seven days a week.

Central Europe

Tesco’s U.K. sales declined for a fourth straight quarter in the most recent period as Chief Executive Officer Philip Clarke struggled to win back shoppers. Online sales rose 10 percent in the U.K. last year and 40 percent internationally.

The retailer plans to open web sites and online grocery delivery in the Czech Republic and Poland this year, where its Click & Collect service will also be trialed, Towle said.

“It’s something customers will enjoy,” the executive said. “Many of the markets that we’re going to be introducing this into are very much less mature than Tesco, so in many markets we will be pioneering.”

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net


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