Even in the face of a momentous year for online rival Ocado, Tesco was the clear online champion.

Tesco introduced Tesco Direct, its innovative non-food website and catalogue service in September 2006. The service marked the culmination of 11 months' effort by Tesco and its partners to establish a completely new, and substantially differentiated, multi-channel supply chain.

Already, Tesco Direct offers many thousands of products and is receiving more than 1.5 million visits per week. The website has shipped its millionth order and is expected to exceed £150m in sales in its first full year of operation.

As with any fledgling business there were teething problems. Tesco Direct lost its first chief executive, Steve Robinson, after just a year when he left to take up the role of CEO at discount online fashion retailer M and M Direct. But it doesn't seem to have affected the business's performance. And Tesco's online food business also continues to go from strength to strength.

Now covering 98% of the UK's population and turning over in excess of £1.2bn per year,

Tesco.com's margins are close to 10% while growth is running at approximately 25% a year.

Competition remains tough. Ocado has recently seen sales soar after promising to price-match Tesco on more than 5,000 branded grocery products. Asda is now growing its online business substantially, while this week Sainsbury's announced plans to introduce online capabilities at a further 40 stores. But with its integrated offer, Tesco is the online retailer to beat more than ever.

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