Safeway scraps online shopping service

Safeway has scrapped its online shopping trial, saying that it has proved too expensive. The supermarket has wound down the Safeway Collect service that let customers place an order online and collect it from their chosen store.

The service was tested in just a handful of stores, and the supermarket chain has decided not to go ahead with a full scale offering because of the cost.

"Collect was only a trial in eight stores. We never said we were going into home shopping," said a Safeway spokeswoman.

"It would have needed more investment in the delivery logistics which would have taken up resources. At this time we are concentrating on our core business, although we may develop home shopping in the future to support that core business," she added.

Safeway has never offered an internet-based home delivery service of its own.

Wine Direct, the company's online service that offered a selection of 60 wines, was a victim of the dotcom crash. The service was offered in conjunction with Mad About Wine, which ended all third-party agreements in the summer because of financial difficulties. Safeway had planned to expand that online service.

The supermarket chain said that, despite the end of the trial, it is still investing in its website and developing online technology.

When Tesco started an internet shopping service in 1998, the other supermarkets were expected to follow quickly but have remained cautious, with Iceland the only other company to launch a nationwide service.

Waitrose, Asda and Sainsbury's all offer a service in some regions. Waitrose has piloted its WAITROSEdeliver service in four branches and plans to extend it mainly in the south east. Asda offers a service to most areas within the M25, and has recently expanded into West Yorkshire with plans for a wider roll-out over the next two years.

The main challenger to Tesco is Sainsbury's. The company's Sainsbury's To You service now has about 50 per cent geographical coverage but the firm has not confirmed that it will extend the service to the entire country.

"It is likely that in some areas of the country there may not be sufficient demand for a home shopping service. We are concentrating at the moment on rolling out the service to the key urban conurbations," a Sainsbury's spokesman said in September.