Tesco to expand same-day deliveries

Tesco, Britain’s largest retailer, was extending its same-day online grocery delivery service across the whole country, it said on Monday, ratcheting up competition in the cut-throat supermarket sector.

Online shopping is one of the better-performing parts of Britain’s retail sector and has become a battleground for the big supermarkets as they grapple with the growth of German discounters Aldi and Lidl and encroachment into all areas by US retailer Amazon.

Britain’s online food market is expected to grow 54% to £16bn in the five years to 2022, according to industry research group IGD.

Tesco launched same-day grocery delivery in London and southeast England in 2014. It said that by the end of August the service would be extended to more than 300 stores across the UK, covering more than 99% of households — the biggest reach of any UK retailer.

Britain’s second-largest grocer, Sainsbury’s, offers sameday delivery from 30 stores.

For a fee of £3 to £5, Tesco customers can order by 1pm and have their shopping delivered from 7pm onwards.

Tesco said its same-day deliveries had increased 18% so far in 2017.

Earlier in 2017, Tesco extended its same-day “Click+Collect” service to 300 locations across the UK. In June, it launched Tesco Now, which offers deliveries within an hour to customers living in central London.

In 2016, Amazon launched a British version of its US AmazonFresh food delivery service, stepping up the pressure on traditional supermarkets in Britain.

In June, Amazon agreed a $13.7bn takeover of Whole Foods, showing its food retail ambitions.