Britain’s largest grocer, Tesco, has today [Monday] launched its online e-tail service in the US with local partner Safeway, and company officials have made it clear that the US venture is to be a stepping stone for global expansion.

The Internet tie-in with Safeway, California’s largest supermarket chain and separate to the UK retailer, is said to offer consumers a e-shopping experience “almost identical, just painted different colours” to the UK’s existing system. Safeway’s online e-tail site, GroceryWorks, in which Tesco has a 35% stake, bought Tesco’s e-commerce technology and adopted its in-store picking model.

The deal, which was announced last June, formed part of a US$22m joint venture between the two retailers, which Tesco CEO Terry Leahy called “ironic, but also notable”.

CEO of, John Browett, said that he was now looking to form similar partnerships with grocers in France, Germany, Canada, Japan, Australia and northern Italy.  He told the Financial Times: “We have been approached by lots of people who are interested in similar deals […] It’s a question of finding the right partners in the right place at the right time.”

The online operations were launched in Portland, Oregon, where a trial has run successfully in three Safeway stores since early December. Portland was earmarked for the launch because it currently has no online grocery service, after the demise of WebVan last year. Furthermore, the city was chosen above San Francisco, to “avoid a blaze of publicity” – as the system will collapse on the first day if too many people attempt to order food because of too much publicity. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

It is still unknown how long it will take to roll out the e-service to all of Safeway’s US customers, but Browett did however suggest that only between a fifth and a third of Safeway’s 1,500 stores would need to get online to access to a market of 180m people.