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Last Updated: Sunday, 1 October 2006, 10:53 GMT 11:53 UK
Tesco moves into software market
Tesco store in Somerset
Tesco is pushing its range of non-food goods
Tesco is to launch a range of budget own-brand PC software, in a move that will pitch the grocery giant against the likes of Microsoft and Symantec.

Tesco said it would offer six packages, including office software, security systems and a photo editing tool.

Britain's biggest retailer said each title would cost less than 20, challenging what it described as the current "high" price of PC software.

Tesco has been pushing aggressively into the market for non-food goods.

In August, the firm announced it was launching a new home shopping service for a range of 8,000 items including sofas, bikes, golf clubs and cameras - taking the supermarket into direct competition with retailers such as Argos.

Analysts expect Tesco to announce half-year profits later this week of more than 1bn.

More choice

When it comes to software there is little choice and prices are high - our new range of software changes this
Daniel Cook, Tesco

Tesco said its own-brand software range, which will also include a CD/DVD burning tool, would be available in 100 of its stores from later in October.

The supermarket group said it had developed the range of titles with UK software distributor Formjet.

Formjet's products include Ability Office, a software package which includes word processing, spreadsheet and photo editing applications, the basic version of which retails at 20.99.

"When it comes to software there is little choice and prices are high," said Tesco buyer Daniel Cook.

"Our new range of software changes this, bringing choice and value to the market that has offered little of either for too long."

However, the software market has become increasingly competitive recently, with online companies like Google challenging Microsoft's dominance of the industry by offering free downloads of software.

Biggest player

UK's computer software market is currently worth about 8.5bn, according to Tesco.

The software and home shopping services are the latest in a growing list of non-food products offered by Tesco, which also includes finance and insurance packages and phone and broadband services.

Tesco's successful move into retail areas not previously associated with supermarkets has helped the firm hold on to its position as Britain's dominant retailer.

The latest data published last month by market retail analysts TNS Worldpanel showed that Tesco had a 31.4% share of the UK grocery market, followed by Asda with a 16.4% and Sainsbury's with 15.9%.


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