UK-based grocery chain Tesco is set to cease the business operations of its Tesco Direct, as the company identified it as a loss-making business.

Tesco has taken the decision to create a simpler online experience by offering all the products, including general merchandise, clothing and groceries, in one place.

Tesco Direct is a non-food e-commerce business, which sells a range of general merchandise such as technology, homeware, clothing and toys.

The business has recently faced many challenges due to high costs for fulfilment and online marketing, preventing it from delivering a sustainable offer as a standalone non-food business.

Tesco Direct will not be available for customers from 9 July. It will also close the fulfilment centre at Fenny Lock, which currently handles its orders.

Tesco UK and ROI CEO Charles Wilson said: “We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform.

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“It is an essential step towards establishing a more sustainable non-food offer and growing our business for the future.”

“This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future.”

The decision will affect approximately 500 jobs across the Tesco Direct business, but the retailer plans to support employees and external partners.

Following the closure, Tesco will sell general merchandise in-store and online at Tesco.com, while focusing on investing in a single online platform.

The retailer’s Uniform Embroidery Service and Tesco Mobile products, which are currently offered on Tesco Direct, will be added to Tesco.com.

Tesco will not make any other changes to its grocery home shopping service as a result of this announcement.