AO ties up with Tesco to launch first store spaces

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AO.com has joined forces with Tesco to launch its first-ever physical retail format, Retail Week can reveal.

The electricals retailer will open five shop-in-shops as part of a six-month pilot partnership with Britain’s biggest grocer.

AO said the first of the stores, due to open at the Teso Extra in Middleton, North Manchester, next week will allow shoppers to order larger electricals such as washing machines, fridges and TVs for home delivery. Smaller products such as kettles and toasters will be available to purchase off the shelf at the 2,000 sq ft store.

The space will feature an open kitchen area and breakfast bar, where shoppers will be able to ask for help and advice from store staff.

The partnership comes three years after Tesco struck a similar shop-in-shop deal with AO’s electricals rival Currys PC World.

The retailer trialled two physical spaces inside Tesco Extra supermarkets in Milton Keynes and Weston Favell back in 2017.

Tesco has reduced its exposure to the electricals market and no longer sells larger white goods through its stores or online channels.

In 2018, the grocer axed its Tesco Direct website, which was dedicated to general merchandise.

AO said the move into physical retail through the Tesco tie-up was designed to help it “reach even more customers”. To date, AO has resisted moves into traditional physical retailing, though it does operate an outlet site at its recycling plant in Telford.

AO chief operating officer Danny Emmett said: “Tesco serves millions of people each week and we have always said that AO delivers the best way to buy electricals, so we’re excited about bringing the AO experience to even more customers through this in-store trial later this month.”

Tesco chief operating officer Tony Hoggett added: “We’re excited about this new partnership with AO, which will give customers access to a broader range of products and AO’s technical expertise on electrical goods.

“Our Middleton Extra store is the first of five stores to benefit from an AO concession and we’re looking forward to seeing how customers respond to this trial.”