Tesco goes national with PC sales

Tesco will expand its PC operation to an extra five outlets as the retailer reviews its sales model, which includes the option of selling services.

The supermarket giant has run PC sales pilots since July in Pitsea and New Malden (PC Dealer, 15 July). A Tesco statement described these as a 'dramatic success' and it has started the national roll out, with stores in Banbury, Gloucester, Brookfield, Brent Park and Twickenham also stocking PCs. The stores will sell Siemens Nixdorf 233MHz PCs, a lower specification than the Pitsea models, for #679.99.

John Gildersleeve, Tesco commercial director, stated: 'We have no complicated jargon or confusing brand variations. Our offering is simple - a quality PC at great value with all the applications customers will need.'

Terry Cooke, sales and marketing development director at Siemens Nixdorf, said: 'The pilot has taken on a life of its own. If it rolls out nationally, I'd expect sales of about 6,000 units per month for us.'

He revealed: 'Tesco is in the middle of debating what model it will adopt to come to market - stack 'em high and sell on a low price point or add product, services, support and value with increased price and reduced margin.'

Tesco has already expanded the pilot to peripherals with a Lexmark printer.

Tony Hall, director of consumer products at Lexmark, said: 'We can't be blinkered to different channels. I think Tesco is experimenting with the hypermarket model, like the major French retailers that sell everything.'

Jeremy Davies, analyst at Context, added: 'Tesco is good at selling in volume - pile it high and sell it cheap. It works well in the US with Kmart and Wal Mart. If Tesco follows that route it'll do well, possibly with some bolt-on services. Attempting to offer the same service levels as specialist PC retailers could cause problems though.'

The announcement that Siemens Nixdorf will supply PCs to the extra stores will come as a shock to Fujitsu, which is relying on the supermarket deal to establish itself in the PC market in the UK.