Online sales add to Tesco's profits

Posted 17 January 2007 16:20pm by Graham Charlton with 1 comment

Tesco reported a 5.9% rise in its Christmas profits yesterday, ahead of forecasts, which the company has attributed to a strong online performance, as well as increased sales of organic foods.

Meanwhile, DSG Group, which owns Curry's and PC World, seems to be on track having reshuffled its multichannel brands last year, with online sales more than doubling as a result.

In Tesco's case, underlying sales (excluding fuel) grew by 5.9% in the six weeks to January 6, helped by its online store Tesco Direct, which lifted internet sales by 30% on 2005 figures, to a total of £150 million. Online sales are estimated to have added as much as 1% to the like for like sales figures.

After the successful Christmas period, Tesco is now planning to launch its full non-food range online by April.

DSG Group's electrical outlets, Dixons and PC World, both performed well online. Sales at Dixons.co.uk rose by 134%, and internet sales now account for 10% of group turnover, up from 3% a year ago.

Another high street stalwart, Woolworths, reported like-for-like sales down by 4.6% in the six weeks to January 13. However, while the company has not released specific online sales figures, it announced a huge leap in multichannel sales - up more than 200% in the 6 weeks leading up to Christmas.

For Woolworths, the pattern this Christmas seems to be the same as for other high street retailers - instore sales have been relatively poor, while their internet divisions have performed better than expected. For M&S, its online store was its biggest shop, with 9 million customers.

These results, and other trading figures from the Christmas period, all point to the same conclusion - that, as online sales continue to grow, retailers will increasingly need to invest in their e-commerce infrastructure to drive growth. These are multichannel times, folks.

For more figures on Christmas 2006, plus a wealth of other useful information, see the January 2007 update of our Internet Statistics Compendium .