Sainsbury to Expand "Click-and-Collect" Service

By Saabira Chaudhuri

LONDON--J Sainsbury PLC (SBRY.LN) said Tuesday that it plans to expand its "click-and-collect" service, allowing customers to pick up online purchases from vans outside its stores.

The U.K.'s third-largest supermarket chain by market share said in June that it was launching click-and-collect from seven subway stations in London, but on Tuesday a spokeswoman for Sainsbury told The Wall Street Journal that the retailer had since closed five of these locations due to a lack of demand.

Sainsbury instead is pushing into click-and-collect from its stores. It said the first collection sites would be up and running at stores this month, with 100 stores offering the collection service by the end of the year.

While the service is free, customers need to spend a minimum of GBP20 ($30.71) to use it.

Sainsbury will implement the program by using refrigerated vans manned by a staff member that will be parked outside stores.

The latest moves come as competition heats up in the U.K. grocery industry to give customers a more convenient shopping experience. Supermarkets have been opening a raft of smaller-format stores in busy locations. They have also increased their investment in online delivery and click-and-collect as they aim to differentiate themselves from discounters Aldi Stores Ltd. and Lidl U.K. GmbH, which offer neither home delivery nor click-and-collect, and fend off competition from online-only grocer Ocado Group PLC (OCDO.LN).

Mainstream rivals Tesco Corp. (TESO) and Asda, the British arm of Wal-Mart Stores Inc. (WMT), also offer click-and-collect services.

Data published last year from the Institute of Grocery Distribution, the U.K. food industry's research arm, predicted that online would be the fastest-growing part of the U.K. grocery market over the next few years. The institute estimated that online sales would more than double in value to GBP17 billion by 2019, boosted by a surge in the use of home delivery and click-and-collect services.

Write to Saabira Chaudhuri at [e-mail]

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