Tesco announced on its website today that it is closing its online used car business. Credit: Getty Images
Supermarket giant Tesco has hit the brakes on its online used car site Tesco Cars – a joint venture with Carsite - closing the business after just one year, the company announced on its website today.
Tesco Cars had advertised 3,000 cars a month, but a source told Car Dealer magazine that the company was selling only 150 vehicles monthly by the end of 2011.
The company offered vehicles between six months and three years old, with prices starting at £3,000.
Tesco Cars said on its website:
We started Tesco Cars in good faith and we always aim to do a good job for customers. However, following a review of the business model we and Carsite, our partner, have decided that we cannot offer customers a satisfactory range of vehicles and as a result, have decided it is right to close the business.
Tesco will be offering full refunds to all customers for whom it cannot fulfil existing orders.
In 2007, the supermarket company launched a property market business offering a home selling service for a flat fee of £199. That venture closed down in the midst of challenges asserting Tesco was acting as a real estate agent and thus had to follow provisions in the 1979 Estate Agents Act.
Last month, Richard Brasher left the company, the fourth board director to do so since Philip Clarke became CEO in 2011.
Tesco had its worst Christmas season in 20 years last December, and shares lost £5bn in January after the company issued a profit warning. Shares are just 15 per cent above their November 2008 lows.
Tesco stock was trading down 1 per cent Wednesday.