By Dow Jones Business News, September 23, 2013, 12:05:00 PM EDT
LONDON--Tesco PLC (TSCDY, TSCO.LN), the U.K.'s largest grocer, rolled out Monday its own-brand tablet computer,
pitching the 119 pound ($190), 7-inch "Hudl" at the budget end of the market and loading it up with a cart full of
Tesco's digital services.
The device is the latest entrant into a budget tablet market in the U.K. dominated by much better-known gadgets,
including Amazon.com Inc.'s ( AMZN ) Kindle Fire (GBP99) and Samsung Electronics Co.'s (SSNHZ, 005930.SE) Galaxy Tab 2
The device isn't expected to compete directly with the likes of Apple Inc.'s ( AAPL ) iPad in the growing but fragmented
tablet market. Rather, it is seen as another plank in Tesco's strategy to improve its U.K. sales performance,
particularly online, and boost the company's recently purchased digital services, like music and movie downloads.
A button built into the user interface of the device, offered in an array of bright colors, links directly to Tesco's
online shopping, banking, loyalty program, and music and video services. Hudl users can also download competitor's
supermarket apps onto the device, which goes on sale next week and will run Google Inc.'s ( GOOG ) Android Jelly Bean
Online food and grocery sales in the U.K. are set to more than double in the next five years, according to industry
research group IGD. Tesco's online business-including a digital catalog of nonfood items like appliances and toys-
generated GBP2.3 billion ($3.7 billion)-around 5% of the company's overall U.K. sales in the latest fiscal year. But it
is an increasingly crowded market. Large competitors like Wal-Mart Stores Inc. ( WMT )-owned Asda and J Sainsbury PLC
(JSAIY, SBRY.LN) already have well-established online operations, and Wm. Morrison Supermarkets PLC (MRWSY, MRW.LN), the
U.K.'s fourth-largest grocer, will join the fray early next year.
Tesco is in the throes of a home market store refurbishment program prompted by a surprise profit warning last year
that has seen the world's third-largest grocer by sales cut back on international expansion to concentrate on the U.K.,
where it makes two-thirds of its sales and profits.
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