|
Grocery shopping made good profits, although overall Tesco.com incurred a net loss of STG3 million for the period.
"The figures are basically in line with our expectations," said Steven Butler, investor relations director for Tesco. "Grocery home shopping is profitable for us," he said. "Customers like it, so it is profitable."
The increased sales for the first half of 2001 were achieved during a period when the service was still in the process of being introduced, said the company, and Tesco said the net loss reflects the launch cost of new Web sites such as the company's wine warehouse.
At present, six to seven percent of people buying from some Tesco supermarkets are ordering their goods over the Internet, according to the company and with the current growth of sales, Tesco's on-line business is expected to break even during 2001.
"It may sound simple, but we just follow the customer," said Reid. "The more demand there is, the more services we will provide."
Tesco.com is currently available to 94 percent of the UK population, according to the company.
With the success of its on-line operation the company recently made plans to push into the US market. Tesco announced in June that it had plans to take its grocery homeshopping system to the US where there is 60 percent Internet penetration as opposed to 35 percent in the UK. Tesco said it will access potentially 150 million people through 1,500 Safeway Inc. shops in the US. The company is also planning to open in Korea in January 2002.
Gerry Hennigan, equities analyst with Goodbody Stockbrokers in Dublin, said that dotcom companies are now starting to gain some traction in the marketplace. He also said that Tesco.com is now positioned to achieve good revenues after the expenses involved in the on-line service having been established.
Tesco.com has established a lead over its competitors in on-line retailing through the use of its in-store delivery operation to complement its on-line operations, said the company. This contrasts with other on-line operations that use warehouses that are more costly.
Overall, the company posted a 14.2 percent rise in first-half group sales to STG11.5 billion while UK sales rose 10 percent to STG9.8 billion. International revenues increased 46 percent to STG1.7 billion, contributing STG33 million to group profits.
As for Ireland specifically the company said, "In the Republic of Ireland, we are seeing continued sales and profit growth. In the first half we have invested in prices reinforcing our commitment to bring value to the consumer. At present Tesco has 74 stores in the Republic with plans to open an additional three."
Tesco is at http://www.tesco.com
|
