Tesco.com is exporting its successful online shopping model across the Atlantic in a bid to turn around the fortunes of Safeway Inc's flagging net shopping division Grocery Works. Under the deal, Tesco will license its store based technology to Safeway and take a 35% stake in Grocery Works. Tesco finance director Andrew Higginson said: "It's taken us six years to develop our model, and as far as I know it is the only one making a profit. "We are obviously very flattered that Safeway has decided to choose us and we are confident we can give them a short cut to online success." Grocery Works currently operates from two picking centres in Dallas and Houston, Texas, but the cost of transporting orders from a central warehouse combined with a lack of critical mass make the model inherently unprofitable, said Higginson. "The beauty of Tesco.com is that it can lock into the existing supply chain, which is based on stores. There is then minimal disruption to existing services." Grocery Works' warehouses closed on June 26 and the business will be relaunched later in the year using Tesco's store picking model. The branding will be tailored to the different regional banners under which Safeway operates in the US. Tesco's influence will be largely behind the scenes, said Higginson. Tesco expects to see a return on its initial £15m investment by the end of next year. Higginson confirmed Tesco had been approached by a number of other international retailers about using its technology under licence. Safeway operates 1,747 stores across the US and Canada under a variety of fascias. A spokeswoman said Safeway was already moving towards a store based picking model but realised it could set one up more quickly and cost effectively by teaming up with an operator who had already cracked the technology behind it. {{NEWS }}

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