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Supermarket axes online store

Andy McCue silicon.com

Published: 01 Apr 2005 17:15 BST

Struggling frozen food supermarket chain Iceland is to close its loss-making online and telephone home shopping service later this month.

Iceland launched the service back in 1999 but it has failed to emulate the success and profits of similar online offerings by rivals such as Tesco.

As a result the store's CEO Malcolm Walker has decided to pull the plug on the service and to focus resources on its core in-store business as he battles to turn Iceland's financial performance around.

The Web and phone shopping service will close from 23 April and is expected to lead to the loss of around 100 jobs at Iceland's North Wales head office in Deeside.

Walker said in a statement: "It is a loss-making operation and one in which we simply cannot justify further investment of either money or management time. Our core business is also performing badly and the focus of the new senior management team must clearly be on turning that round."

Iceland will, however, continue to offer free home delivery for goods bought in-store and Walker said the closure of the Internet service will free up more delivery slots.