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Gary Sargeant, who was loaned by the UK's Tesco to help develop its online co-venture with Safeway in the US, told the East Bay Business Times in an interview that their business,, could become a $1 billion annual business within five years.

Sargeant would seem to have some credibility on the issue. He came to the US after Safeway acquired, and was given three years to get the business into shape.

He's going back to the UK after two years. Mission accomplished.

Not that necessarily is profitable. The company won't comment on how much has been spent on the online business, nor specifically on whether or not it is making money. But it is expanding - which these days is definitely a good sign.

Sargeant also is credited with developing Tesco's online business in the UK, which is said to be profitable for the mother company.

In the interview with the newspaper, Sargeant said that has been successful because it uses a store-pick model - just like Tesco does, and unlike the model used by Webvan before it went out of business.

"Webvan was a good thing, a great experiment," Sargeant told the newspaper, saying that "it gave us a chance to see what works and what doesn't in this business."
KC's View:
It may eventually be said that the smartest thing that Safeway has done in the past decade was entering into a partnership with Tesco.

Certainly their co-venture in online retailing has been one of the bright spots for the company - and who might have predicted that a few years ago?

Safeway and its management have been taking a lot of hits lately - about Genuardi's, Dominick's, about their Texas operations. Could it be that some sort of broader merger or partnership with Tesco is in the cards…?

If so, Tesco's US mission may have only just begun.