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Tesco Extends Same-Day Grocery-Delivery Service Nationwide

Published on Jul 25 2017 8:40 AM in Retail tagged: Trending Posts / Tesco / UK Retail / Online Delivery / GlobalData Retail

Tesco Extends Same-Day Grocery-Delivery Service Nationwide

UK retailer Tesco has announced that it is extending its same-day grocery-delivery service across the entire country.

Tesco launched its same-day grocery-delivery service in London and the south-east in 2014, but it is now extending the service to over 300 stores across the UK, which will service 99% of households. It will become the first UK retailer to offer the service nationwide.

Customers can order by 1pm to have shopping delivered from 7pm that evening. The new service is priced between £3 and £8, and will be rolled out across the country by the end of August.

Growing Demand

Tesco says that same-day deliveries are increasing in popularity, having experienced an 18% growth in demand so far this year.

“Customers tell us they like getting their shopping delivered quickly and conveniently, and with our same-day delivery service, they can now order by lunch to get their shopping delivered for their evening meal," said Adrian Letts, managing director of Tesco Online.

“We’ve seen the service grow in popularity since we launched it in London and the south-east, so we’re really excited to be rolling it out to customers nationwide,” Letts added.

Last month, the retailer also introduced Tesco Now, which offers a one-hour grocery-delivery service to customers in London.

The Amazon Effect

According to Neil Saunders, managing director of GlobalData Retail, Tesco's decision to go down the same-day delivery route is a "defensive measure" against the potential rise of Amazon's food-delivery services in the UK.

Saunders said, "The announcement by Tesco makes it even more likely that Amazon will, over the medium term, look to make an acquisition in the UK grocery market. While this is unlikely to be one of the larger players, an operator like Ocado would give Amazon the scale and flexibility it needs to offer a sustainable UK-wide online grocery service.

"Although Tesco now has first-mover advantage on same-day grocery delivery, the long-term implications are not necessarily so rosy. Margins in online grocery remain wafer thin, and while consumers will pay a premium for same-day service, they will not bear the full cost. As such, as other players increase flexibility in deliveries, and as delivery prices come under further pressure, the move could ultimately be dilutive to profits."

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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