November 2002

With the approach of the Christmas peak, online grocery retailers have been battling to outdo each other in reach and market presence. Sainsbury's says it was making 33,000 deliveries a week by the autumn, while Tesco claimed to be expecting to deliver up to 24,000 orders a day by Christmas Eve.

Tesco says its online operation is already profitable; Sainsbury's now says its rival operation will be in profit by the latter part of its 2003-4 financial year. It cut losses from £29million in the first half of 2001 to £19 million in the first half of its current year.

Tesco is in a particularly buoyant mood, claiming its sales reached £10 million in a week for the first time in late November, when well over 100,000 households placed orders online. It says its 950 delivery vans can now reach 95 per cent of the population.

Sainsbury's expresses its coverage differently, claiming to reach 74 per cent of UK households, and is now working from 71 stores, plus its picking centre in Park Royal, London.

Its coverage should be enhanced as a result of a deal it has just struck with communications giant NTL. Its home shopping service has now gone live on the cable company's interactive shopping channel, which is said to cover nearly 50 per cent of the UK.

According to Robin Lassiter, Sainsbury's director of home shopping, NTL "has the best platform and is a good geographic fit with our home shopping service."