The Supermarket on the internet

Most supermarkets sell items via the internet for home dilivery. This revives the home delivery service offered in the 1960s by the likes of Sainsburys. Not all supermarkets have found a web presence pays in Britian.

TESCO the UK grocery chain bucks the trend of failing e-commerse companies by revealing that its e-commerce operations will be profitable earlier than expected UK retailer Tesco has reinforced its position as one of the UK's e-commerce success stories after forecasting that its Web operations will reach profitability by the end of this year. In the period between 24 February and 11 August, Tesco.com achieved sales of £146m -- a 77 percent rise on the same period in 2000. The site made a total loss of around £3m, which the company partly attributed to the cost of setting up new services such as a wine warehouse. The company had the largest retail sales on the internet in europe for this period

"Tesco.com will be profitable by September 2001" said chief executive Terry Leahy. "Grocery homeshopping is already in profit and we recently announced that we are taking grocery homeshopping to the USA," he added. The company had previously predicted that it would reach break-even point in 2002. Tesco's deal with US grocery retailer chain Safeway will give it access to millions of potential American customers. "There is 60 percent Internet penetration in the US as opposed to 35 percent in the UK. We will be accessing potentially 150 million people through 1,500 Safeway shops," said Leahy. The e-commerce grocery sector has recently gone sour in the US. Dot-coms such as Webvan were once tipped to revolutionise shopping in America, but the company was forced to file for bankruptcy back in July 2001.

Unlike ASDA -- which spent heavily to construct its own warehouses -- Tesco.com fulfils online orders at local stores. Some analysts believe this model could help it to succeed in America, if its deal with Safeway helps it to offer a reliable and cost-effective service. Tesco also announced that 35 percent of applications for its new Personal Finance products are now being made via the Internet. The company made total profits of £481m, a rise of 14 percent, on turnover of £11.5bn. It is planning to create 20,000 jobs worldwide this year.

Asda has recently announced in will close its dedicated e-dilivery centres and work from existing stores like Tesco

The rest of the story

If all that supermarkets used the internet for was sales it would be of interest. Super markets use the internet to reorder stock from thier central depots. They alos provide extensive details of the sale of items to the manufacturers who supply them over the web.

Under this sytem a company like Bernard Mathews logs on the the Waitrose site to see how the sale of his products is going, they can then plan production to meet the need of the retail partner.

Supermarkets use the internet to gain access to the credit card databases run by the banks when a sale is made. They also use connections to allow cash back facilities on debit cards and can offer a range of other services via these link ups. Fradulent use of cards is also prevented in this system.

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