Tesco.com, has established a position of being the world’s leading online grocer with an estimated sales turnover of £401m and profits up 37% to £21m (as at 21 September 2005).

However, Iceland was the first UK retailer to offer nationwide delivery of a range of groceries ordered via the web and yet they have ceased to offer this service. Why has Tesco.com been able to establish such a dominant market position?