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Tesco Marketplace to shut along with Tesco Direct

By Chris Dawson May 22, 2018 - 9:10 pm

Tesco is the third UK marketplace to shut this year, following the closure of the Halfords marketplace in April and Gameseek calling in the liquidators.

Tesco say that they have conducted a detailed review of Tesco Direct, their non-food website, and has concluded that, despite best efforts, there is no route to profitability for this small, loss-making part of the business. However Tesco Direct included the Tesco Marketplace and their Press Office have confirmed by telephone that the marketplace will also close.

Tesco Direct will cease trading on the 9th of July 2018 and, as part of this, the intention is to close the fulfilment centre at Fenny Lock which handles Tesco Direct orders. Sadly around 500 employees will be at risk of redundancy across the business.

This will also have a significant impact on the several hundred third party merchants who sell on the Tesco Marketplace. We’ve already heard from merchants who have committed to stock orders for Christmas on the back of anticipated sales based on past performance on Tesco. Whilst we believe there were no more than 300-400 merchants selling on Tesco, for those that did sales were relatively strong and they are looking at the loss of multiple hundreds of thousands of pounds worth of turnover.

Tesco Direct always sat slightly awkwardly alongside the main Tesco site (as does their wine offering) and the plan is to roll non-food products into the same platform as their groceries at tesco.com.

“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.

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.”
– Charles Wilson, CEO of Tesco UK & ROI

The UK marketplace field has already considerably contracted this year leaving eBay and Amazon as the default marketplaces of choice for both consumers and for merchants wishing to sell online. There are smaller marketplaces and specialist niche marketplaces but they don’t yet have the pulling power of the big two. For merchants wishing to diversify their businesses and reduce their reliance on eBay and Amazon expanding to overseas marketplaces is looking increasingly like the only current option for those wishing to expand at scale, although supporting the alternatives is the only way that they will grow.

Our thoughts do of course go out to those Tesco employees and merchants whose jobs are at risk.

  • SAM
    5 months ago

    Overseas marketplaces are the only other option we really have in the UK. We have let 2 overseas marketplaces totally dominate our own domestic market (caused a right race to the bottom) and have pretty much full control of thousands of Uk small businesses in turn. That is before we even get into what is happening to hundreds of high street shops and independent biz like Game seek…(fair few biting the bullet now)…
    Least it is easy to get our products overseas…. ahhh wait a minute oops we have Brexit to kill that business also…can count on the Tories to destroy just about everything in 8 years…tax Dodgers and bankers will be ok as norm..

    • Andrew
      5 months ago

      Brexit will increase oppertunity not elliminate it. And who ever said that you can not sell somthing to somone in say france after brexit regardless of a trade deal. Brexit has nothing to do with anything. Trade will continue and increase.

    • Dave
      5 months ago

      Brexit has everything to do with everything. Those who think otherwise completely misunderstand Brexit.

    • james
      5 months ago

      “who ever said that you can not sell somthing to somone in say france after brexit regardless of a trade deal.”

      quite a lot of people.
      if there’s no trade deal at all, it could be impossbile, depending on your item.
      you may need to obtain separate licences and set up tax arrangements separately in every country you ship to.
      with a poor trade deal, there may be massive tarriffs / import duties making a sale incredibly unlikely.
      your goods will all be stopped at customs, will require extra paperwork, customs pre-notifications, and all that equals time, and time equals money.

      absolute best case scenario? you end up with the trade deal we have now.

      there’s nothng stopping me buying an item from france now, it might even get to me by the end of this week.
      without a trade deal, those goods are getting stopped at customs, and i’m getting a second bill off the courier when they deliver the item.

    • LEE PEARCE
      5 months ago

      Worst case scenario is that you have to stick customs label on your outgoing post to outside the UK, just like we do now with post outside the EU.

      If you use a programme to produce your shipping labels then it will be done for you and if not, then you will have a little more work to fill one out.

      Whatever the rules will be, there is no point moaning about it, just adapt your business so as to comply.

      When France dropped the distance selling threshold from 100,000 euros to 38,000 a few years back, our sales in France rocketed because loads of sellers stopped selling into France when nearing the threshold or stopped altogether instead of registering in France.

      I am looking forward to the upsurge in sales post brexit mainly due to my competition not being ready.

  • mark
    5 months ago

    Wow how sad.

    I thought it meant they were pulling out of selling on eBay, but never mind hopefully that will come soon as well. Then eBay will have one less big boy to set standards by that squeezes the little businesses.

  • 5 months ago

    Very sad to hear. Watched the marketplace closely for years now and could see the potential – seems a shame to close!

  • Colin
    5 months ago

    We are merchant partner on Tesco Direct & they have not even emailed us yet to tell us what is happening. We found out from Sky news!

    • Colin
      5 months ago

      A letter has just arrived in the post.

  • ifellow
    5 months ago

    Sad had some good prices and geat deals

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