Home shopping service gives Tesco direct access to non-food market

London Briefing: Tesco's march towards world domination continues apace, with the British launch today of Tesco Direct, its …

London Briefing: Tesco's march towards world domination continues apace, with the British launch today of Tesco Direct, its latest assault on the non-food retail market.

In a move that will step up the competitive pressure on rivals such as Argos, the supermarket giant is now offering a home shopping service with a range of more than 8,000 lines, from electrical products and golf clubs to bicycles and, for the first time, sofas and beds.

The new Direct service is available only in Britain and Northern Ireland, although the Republic is likely to follow in time as it did with Tesco.com, which was launched in the UK in 1995 and extended to Ireland in 2000. Tesco.com has sales of more than £1 billion (€1.48 billion) a year, but only a small proportion of those online sales - £80 million - is accounted for by non-food lines and the group is determined to make real inroads into the wider retail market.

This is partly through necessity - Tesco has built a commanding lead in the UK grocery market, now claiming a share of more than 30 per cent, and is increasingly criticised for its dominant position.

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Pressure groups including Friends of the Earth and the GMB union last year set up an anti-Tesco website - Tescopoly (www.tescopoly.org) - which they use to highlight what they say are the "negative impacts" of the supermarket's behaviour.

Their slogan, "Every little hurts" is a barbed play on Tesco's long-running "Every little helps" catchphrase.

As the criticism mounts, and the Competition Commission conducts yet another inquiry into the £95 billion a year grocery market, Tesco is redoubling its efforts to expand in other areas, whether it be non-food or overseas.

In the UK, its share of the non-food market is still only around 7 per cent although, by the end of the year, it is forecast to overtake Argos as the country's largest non-food retailer.

Much of the group's expansion has been overseas in recent years. It has already established strong positions in Asia and eastern Europe and is now aiming for the big one - the US.

The retail world is transfixed by Tesco's imminent move into the massive US market although, since first announcing its ambitions in February, there has been little detail from the group. However, the importance of its transatlantic foray is underlined by the fact that the executive chosen to spearhead it is Tim Mason, right-hand man to Tesco chief executive Sir Terry Leahy.

Although the US plans are shrouded in secrecy, some fascinating details have recently emerged: a year before announcing its plans, Tesco is said to have sent 50 senior directors and researchers to live with American families for a fortnight to study how they shopped.

And when it built a pilot store in Santa Monica, not only was it hidden within a warehouse, the contractors initially claimed they were building a film set instead.

Early reactions from US consumers allowed to test the trial store are, apparently, very encouraging, with Tesco's ready meals singled out for particular praise. The stakes are high for Tesco and the group is clearly leaving nothing to chance ahead of going live next year.

Many UK retailers have failed spectacularly in the US market, notably Marks & Spencer and Sainsbury's. Sir Terry is determined to be the British retailer that succeeds on both sides of the Atlantic.

High-tech helpline

Still in the retail sector, "electrical plumbers" for the technologically inept is the latest wheeze from DSG International, the Currys, PC World and Dixons electrical products group.

Research by the group, Britain's biggest electrical goods retailer, has uncovered what most of us already know: we can't work the products we buy from them.

Although computers and televisions are becoming more reliable and less prone to break down, the group's research revealed that as many as two-thirds of people in Britain had dumped electrical goods in frustration without any attempt to repair them.

The group also said that one-third of customers who bought televisions came back within four weeks with a technical problem.

Now DSG has set up a specialist support service, called "The Tech Guys", to help people baffled by technology to cope with their increasingly sophisticated machines.

DSG is investing £50 million in the new business, which will create 2,000 jobs for geeks with a helpful bent.

Initially launched in Britain, DSG ultimately plans to roll out the service to the rest of Europe.

DSG's chief executive, John Clare, who promises that the service is all about fixing things rather than trying to sell new products, believes domestic technical support will become as commonplace, if not more so, as visits from plumbers and electricians.

The market for support services is estimated to be worth as much as £1 billion and, he says, could double within the next five years.

These wired-up technicians may be a world away from the traditional boiler-suited plumber or electrician.

But there is one distinct similarity, as anyone who has ever had to pay through the nose to have their boiler fixed on a cold winter weekend: calls to the 24 hour support centre will cost £1.50 a minute, while call-out charges for knottier problems will set you back at least £80.

Plus ça change, even in our brave new high-tech world.

Fiona Walsh writes for the Guardian newspaper in London

Fiona Walsh

Fiona Walsh writes for the Guardian