Tesco taking on Carphone Warehouse

Tesco, with the announcement today that its sales topped £1 billion a week, is also growing its phone offering, taking on Carphone Warehouse.

Tesco is looking to significantly grow its non food offering.

A key part to achieving this is it plans to more than double its number of instore phone shops.

The instore shops will be rebranded as Tesco Phone Shop.

Tesco currently has approximately 50 phone shops, all in its larger stores, and is looking to grow this number to 100 by next March.

The phone shops offer a range of mobiles on a pay as you go or contract basis and also offer landline phone deals.

It already has a 13% share of the UK pay as you go phone market and with the massive growth proposed will start to put pressure on Carphone Warehouse, although it of course has significant market share.

With a joint venture with O2, Tesco also offers its own brand mobile phone that has 2 million customers. The initial target is to continue to grow and catch up with immediate rivals Virgin Mobile and 3.

As well as looking for growth in profits from phones, Tesco also recently announced it plans to open instore bank branches offering savings accounts, insurance and credit cards, with current accounts expected to be added in the future.

The banking opportunity particularly arises now following the Tesco acquisition of the Royal Bank of Scotland’s 50% stake in Tesco Personal Finance.