LONDON (Reuters) – Tesco <TSCO.L>, Britain’s biggest retailer, said on Tuesday it will close its non-food website Tesco Direct in July, having decided it could not make the loss-making business profitable.
The group said it will focus on a single online platform for groceries, general merchandise and clothing – Tesco.com.
Tesco Direct will cease trading on July 9 and, as part of this, a distribution centre at Milton Keynes, south east England, which handles the website’s orders will also close.
It said the decision means 500 workers across the business will be at risk of redundancy.
“Tesco has conducted a detailed review of Tesco Direct…and has concluded that, despite its best efforts, there is no route to profitability for this small, loss-making part of the business,” it said.
The firm said it would still sell a range of general merchandise – in stores and online at Tesco.com.
Tesco.com already sells items such as toys, home and cookware and would build-up its offer.
“This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future,” said Charles Wilson, CEO of Tesco UK and Ireland.
The move is the first major decision made by Wilson since he started the job in March.
Wilson is the former boss of wholesaler Booker which was acquired by Tesco this year.
Shares in Tesco were down 0.6 percent at 14.59 GMT.
(Reporting by James Davey, Editing by Paul Sandle and Kate Holton)