Tesco, the UK's largest retailer, has announced changes to its home delivery minimum spend and basket charge.
Starting May 2nd, customers must spend a minimum of £50 for home delivery, up from £40. Failure to meet the minimum spend will result in a £5 charge, up from £4. However, the minimum spend for click and collect remains at £25 for all stores.
Compared to Tesco, Sainsbury's requires a minimum spend of £40 or a £7 fee, while Asda charges £3 for spending below the £40 threshold.
These changes are the first Tesco has made to its minimum basket threshold in nearly eight years, according to a Tesco spokesperson, who added that the majority of customers will not be affected.
In other news, Tesco's rapid delivery service, Whoosh, is now available in 1,000 Express stores in the UK, exceeding its targets for rollout. This scheme, which currently half of Tesco's convenience stores are operating. Whoosh offers customers the chance to order food or snacks from a curated list of 2,500 to 4,500 essential products in as little as 30 minutes, with delivery set at £2.99 for orders that cost £15 or more.
Tesco has also recently announced changes to its Clubcard loyalty scheme, with vouchers worth less than their previous value when exchanged at any of its reward partners, starting from the 14th of June this year. Previously, vouchers were worth triple their value when exchanged with over 100 reward partners, including Legoland and Pizza Express, but will now be worth double the value of the voucher.
Tesco's half-year profits, announced in October 2022, more than halved, collapsing by 63.9% to £413 million (from £1.1 billion in 2021), which may explain the sudden interest in cutting costs and increasing delivery charges to cover the escalating cost of fuel, energy and staffing costs, with Tesco due to be increasing staff wages by 7% in April 2023, plus the increase in the costs of products from suppliers, trying to remain competitively priced during this cost of living crisis, and store running costs.