Tesco has announced plans to close its Tesco Direct website putting the jobs of 500 workers at risk.
The retailer confirmed that the website, which sells non-food items such as clothing and homeware, was making a loss and had “no route to profitability”.
High delivery and marketing costs have been cited as key problems in sustaining the arm of the business.
The website, along with its distribution centre near Milton Keynes, will close on 9 July.
Originally set up to take on Amazon, customers will still be able to buy some Tesco Direct products at Tesco.com.
Tesco said it would support staff affected by the changes.
“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,” said Tesco boss Charles Wilson.
“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.”