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Retailers swallow online food cost to lock in shoppers

09
Jul
2014

They are trying to hook customers up to brands for their grocery shop and hope they will spend on non-food which is lower headache and higher margin, which will drive profitability, said Sophie Albizua of retail consultancy eNova Partnership. It is notoriously difficult to make money selling groceries online. The reason why people do it and need to do it have nothing to do with profit and nothing to do with groceries. Britain has led the way in selling groceries online, with e-commerce already accounting for some 5 percent of food sales. COMPELLING ECONOMICS It has taken Tesco, Europes second biggest retailer, 17 years to bring its online grocery business close to the industry-leading margins it used to make in its store business.

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