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Wednesday, 20 September, 2000, 13:13 GMT 14:13 UK
Food retailers go offline
Budgens screen grab
Budgens Online ... not anymore, at least for its shoppers
UK food retailer Budgens has abandoned its internet home shopping service after the website failed to meet expectations.

Smaller grocery chains in the UK have found it difficult to break into the market, which is dominated by retailing giants like Tesco, which has just added electrical goods to its online range.

Troubled supermarket chain Somerfield pulled out of web retailing in June.

Tesco electical screen grab
Tesco now sells electrical goods from audio equipment to washing machines
Budgens chief executive Martin Hyson said the "phased launch" of Budgens Direct had shown that "at this stage there is a low level of customer interest".

In a statement he argued that "we can continue to deliver greater value to our shareholders by focusing on our core proposition of fresh food-based neighbourhood stores".

Budgens goes local

Instead of reaching for a national market on the web, the firm wants to focus on its roots, supplying small independent food retailers, who will then trade as "Budgens Local".

Its own small shops will be called "Budgens Express".

Retail analyst Matthew McEachran at Investec Henderson Crosthwaite said it was "a positive move" because "the business just did not generate enough revenue to make it worthwhile".

Food on the web

UK online food market leader Tesco, meanwhile, announced it would expand its internet operation, adding 1,000 electrical goods to its product line-up.

Tesco's web range would then include smaller items such as games consoles and cameras and extend to large products including television sets and freezers.

The company is already taking 60,000 online orders each week, generating sales worth 5m.

In comparison, Budgens entire bricks-and-mortars operation generated sales averaging just 8.7m a week.

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