Tesco targets ‘close loop’ packaging system, shuts down Tesco Direct

tesco-822278Supermarket giant Tesco has announced a ‘closed loop’ packaging system as it called on the UK Government to support with the national recycling infrastructure.

Tesco said in a statement its ambitions for a closed loop system across its UK operations.

“We are committed to reducing the total amount of packaging used across our business. Ideally we would like to move to a closed loop system,” said Jason Tarry, chief product officer.

“We will work with our suppliers to redesign and reduce all packaging materials and after consultation with our leading suppliers earlier this year we will remove all packaging that is hard to recycle from our business by 2019. To complete the journey to a closed loop approach, we stand ready to work with government to reform the current approach to recycling in the UK.”

The supermarket giant pledged its commitment at a speech to hundreds of suppliers at the Institute of Grocery Distribution (IGD) event yesterday.

  • Remove, reduce and redesign packaging materials and their use
  • Improve recovery and recycling, ideally working with government on a national recycling infrastructure
  • Work to raise awareness and educate in order to change customer behaviour

Tesco further said it called on the UK Government to establish a consistent recycling infrastructure across the country where variations in current levels of actual recycling are extreme. As a part of its plan, the supermarket giant plans to also work to develop easy to understand packaging recycling communication and the amount of recycled materials it buys to help shoppers who want to reduce their packaging impact.

Tesco refocuses non-food business as it shuts down Tesco Direct

Tesco also announced yesterday its decision to shut down Tesco Direct, its non-food website, after reviewing it and the supermarket giant concluded that, despite its best efforts, there is no route to profitability for this small, loss-making part of the business.

The supermarket giant said in a statement Tesco Direct has faced a number of significant challenges, including high costs for fulfilment and online marketing, which have prevented it from delivering a sustainable offer as a standalone non-food business. Tesco Direct will cease trading on 9 July 2018 and will close the fulfilment centre at Fenny Lock which handles Tesco Direct orders.

We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform. This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future,” said Charles Wilson, CEO of Tesco UK & ROI.

Tesco said it remains committed to bringing a compelling range of general merchandise to its customers, both in-store and online at Tesco.com. It’s ambition to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.

The supermarket said it began the process a while ago and customers shopping online can already buy products such as toys, home and cookware. Opportunities to selectively build on this offer will be made as investment is focused on a single online platform. There are no other changes to the Tesco grocery home shopping service as a result of this announcement.

There are approximately 500 colleagues who will be facing the risk of redundancy across the supermarket business and the priority is to support colleagues, and external partners, that will be affected by this change.

‘‘Supermarket giant Tesco has put its cards on the table by announcing the planned closure of its loss making non-food website, Tesco Direct, in an effort to streamline operations and rid it of uncompetitive product lines as it prepares to increase investment into one online platform. The recent news of Sainsbury’s and ASDA’s proposed merger would not only create a market-leading grocer, but a powerful force across markets including clothing and general merchandise – and the closure of Tesco Direct will help prepare Tesco for the competitive road ahead,” said Thomas Brereton, retail analyst at GlobalData.

“Tesco’s position as the UK’s leading grocer is under immediate threat from the CMA pending Sainsbury’s – ASDA entity, with the 23.4 per cent combined share casting Tesco in a distressing shadow in the Food & Grocery sector. So the news – which falls on the same day as the announcement of a waste reduction initiative – is clearly Tesco taking an active role in defending its core food business.”

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