High street names 'to beat dot.coms'

Tesco.com claims to be the UK's largest e-commerce site

Established stores are poised to outcompete dot.coms in the battle for etail trade, supermarket giant Tesco has said.

What are all those items? We do not know if it is just eggs

Company spokesperson, Amazon.co.uk

The store, which on Friday claimed to have the UK's most popular e-commerce operation, credited the existence of its bricks-and-mortar heritage for much of a surge in online sales.

The store's website despatched more than 30 million items to UK customers in the run-up to Christmas, four times as many as in the same period last year, and almost 10 times as many as flagship etailer Amazon.

And John Browett, chief executive officer at Tesco's etail site, Tesco.com, predicted long-standing retailers are set to pull further ahead of dot.com rivals.

Established network

"What we have use of is an established distribution network, an established infrastructure, through the existing Tesco stores," Mr Browett told BBC News Online.

"Start-up retailers have to shoulder all the burden of that themselves."

Tesco, which has 100 staff on its dot.com site, employs 8,500 part and full-time product pickers and packers around the country, Mr Browett said.

Newly established etailers are also likely to have higher marketing budgets, he said.

"Ten million people shop in our stores every week, and they can be made aware of Tesco.com through advertising in the store," Mr Browett said. "A start-up will not have that resource.

"When it comes down to it, when a start-up runs out of venture capital money which is supporting, and gets involved in a price war with a firm backed by huge resources, who is going to win?"

'Just eggs?'

Amazon's UK site, Amazon.co.uk, pointed to the opening of its distribution centre near Milton Keynes as evidence that it rated as an established business.

The centre, the biggest yet developed by a UK etailer, helped the firm deliver 3.3 million items in the run-up to Christmas, more than twice as many as in the same period in 1999.

The centre will open officially in the spring.

Amazon.co.uk also questioned the basis of Tesco.com's sales figures.

"What are all those items? We do not know if it is just eggs," a company spokesperson said.

Both firms, however, welcomed the rise in online sales as evidence that internet shopping is "here to stay".

Shares in Tesco closed 3.5 pence higher at 261p on Friday.