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Online Food Orders Leave Tesco With No Margin For Error

Head of Tesco, Dave Lewis, has called for a tax on all internet sales,...

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Online Food Orders Leave Tesco With No Margin For Error

22nd October 2018

News : Commercial

Head of Tesco, Dave Lewis, has called for a tax on all internet sales, in a desperate attempt to curb the dominance of Amazon.

Tesco currently operates at a profit margin of 2.9%, but Lewis is tasked with increasing that to 4% by 2023. With online orders forecasted to increase by 50% in that time, the online market will be crucial to Lewis.

But online orders carry additional overheads: fuel, vehicle maintenance and delivery driver salaries all eat into that already slender profit margin.

Supermarkets, like any grocer, will be market-led and demand for online food orders seems unlikely to decline – will consumers soon be hit with additional charges for the convenience of home delivery, or will Lewis need to re-think his profit margin targets?

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