Sainsbury's freezes its online expansion

Sainsbury's is halting expansion of online shopping service Sainsbury's to You as it focuses on its core stores.

The grocer's online service, which covers 72 per cent of the country, broke even in March, but Sainsbury's newly- arrived chief executive Justin King has decided not to increase its geographical coverage at the moment.

A spokeswoman said that Sainsbury's to You would focus on improving its customer service, as well as gaining higher sales and more shoppers in the areas it already serves.

Last month, King revealed that the grocer is likely to reduce capital expenditure from£700 million to less than£500 million this financial year as he attempts to get Sainsbury's house in order.

He plans to concentrate 'all resources on customer-facing activities'.

Retail Knowledge Bank research director Robert Clark said: 'Sainsbury's has made some headway online, but it is very small beer in the scheme of things when you look at Tesco.com.'

Sainsbury's to You delivers approximately 35,000 orders a week and generates sales of about£200 million a year, while Tesco.com fulfils 120,000 orders a week and has sales of£577 million.

John Lewis-backed Ocado is piling pressure on Sainsbury's to You in the Southeast and Midlands, while Asda plans to roll out its e-tail shopping service to 40 per cent of the UK this month.