Tesco introduces free delivery as it prepares to confront Amazon
Tesco will introduce free delivery in its latest bid to head off Amazon’s attempt to muscle in on the British grocery market.
Tesco boss Dave Lewis today told the Sunday Telegraph that the supermarket will add free delivery to its Clubcard Plus loyalty scheme.
It comes after the technology giant announced last month it would offer free delivery to its 15m members in the UK, as it expands its Fresh food network.
It allows customers to buy cheese, baked foods, fresh meat, fruit and vegetables with no delivery fee if they subscribe to its £7.99 a month Prime service.
“I understand the move [from Amazon],” he said. “The idea of Prime is very similar to where we are in Clubcard Plus, in terms of bringing a whole bunch of benefits together. So an opportunity into the future for us is to think about how we put delivery into Clubcard Plus. That’s always been the direction of travel.”
Amazon’s intervention was seen as a huge signal it was capitalising on increased demand for online groceries after lockdown restrictions triggered a change in consumer habits.
Last November, Tesco introduced a new loyalty scheme, Clubcard Plus, which works in tandem with its old membership programme through which customers can earn points.
Customers currently pay a subscription fee of £7.99 per month and get 10 per cent off their bills twice a month, up to a maximum of £20 for each shop.
All supermarkets currently charge for delivery as the fees are considered crucial for funding online sales. Lewis warned that the supermarket has to “make sure that we can manage capacity with that [online] demand” before it introduces it.