1.0 IntroductionThe food industry is a huge, fragmented and hugely competitive environment and there are currently several examples of food companies that are making effective use of the Internet to connect with customers (Delaney-Klinger , 2003). In particular, Tesco currently has profitable Internet channels for selling groceries (Hall, 2001; Koller, 2001). During the late 1990s many new companies were created to take advantage of the perceived benefits of using the Internet in business, however, with their rapid rise and fall it soon gave rise to a phenomenon known as the "dot era" .com” (Lovelock, 2001). Questions were then raised about the added value that the Internet brought to businesses and how these technologies could be used competitively. Grocery companies have chosen to diversify their service by introducing online equivalents of conventional stores. Porter (2001, p.62) criticized numerous Internet business pioneers for violating fundamental strategic principles: “Gaining competitive advantage does not require a radically new approach to business; requires building on the proven principles of an effective strategy.” The most successful example of an Internet company that has built its strategy on an effective precedent is Tesco's online service. However, some companies, such as Webvan, fall into the category criticized by Porter (2002) and have failed in the online grocery industry. 2.0 Tesco.com Retail giant, Tesco, has captured 30% of the UK grocery market, a figure which is around double the collective share of nearest competitors Asda and Sainsbury's. Overseas sales are growing even faster (Emerald, 2008). Tesco.com views Internet grocery ordering as "an additional sales channel" (Delaney-Klinger, 2003), recognizing that this service will never surpass that of grocery shopping. With this in mind, one of Tesco's strategies has been to market online groceries as a convenience and not a low-cost option (Delaney-Klinger, 2003). Tesco's research into small online grocery markets allowed them to develop a suitable strategy that allowed the organization to operate within its own means. Providing a hybrid 'bricks-and-click' service, Tesco used existing stores as a depot where online orders would be distributed relative to consumers' location; thus reducing startup costs. 2.1 Sustainability Tesco's sustainability is evident in how they add value with their "plan to target online shoppers via Clubcard, rather than just fishing the internet user pool". (Humby et al, 2003). Tesco's Clubcard assists their online strategy as it collects data from every purchase; the data is then changed in-store and online to reflect the product range deemed important by customers.