Tesco tests cashless store in London

LONDON (Reuters) - Tesco <TSCO.L>, Britain's biggest supermarket chain, opened its first high street cashless store on Tuesday, marking a shift among shoppers to electronic payments from coins and notes.

At the Tesco Express store on High Holborn in central London, shoppers can pay at self-service tills using a range of electronic payment methods, including debit cards, credit cards and Apple Pay on their phones. They cannot use cash.

It is Tesco's first mainstream store to go cashless after it opened one at its Welwyn Garden City headquarters campus in 2018. That store is mainly used by Tesco staff although the general public can also use it.

The Welwyn store is also trialing a checkout-free method of payment, allowing customers to scan products on mobile devices to deduct payment directly before they walk out of the store. That option is not available at High Holborn branch.

A Tesco spokesman said the High Holborn store would help customers pay more quickly. "We are looking forward to hearing customer feedback," he said.

The 101-year old Tesco, which trades from 3,787 stores in Britain and Ireland, chose the High Holborn store for the trial because it serves a high concentration of office workers. It said it wanted feedback before considering rolling out the idea elsewhere.

Tesco has previously said some of its convenience stores in Britain were already only receiving 20% of payments by cash, making a cashless roll-out likely in future.

The Bank of England said debit cards overtook cash as the most frequently used payment method in Britain in 2017 and it forecasts that alternatives to cash will become ever more widely accepted and used.

But there are notes worth more than 70 billion pounds ($91 billion) in circulation in Britain and the central bank remains committed to cash. Although cash use is falling, it says many poorer and more vulnerable people still prefer notes and coins.

U.S. online giant Amazon <AMZN.O> has been experimenting with checkout-free grocery stores since 2018. Amazon Go relies on cameras and sensors to track what shoppers remove and put back from shelves. Customers are billed on leaving the store using credit cards held on file.

Tesco's main UK rival Sainsbury’s <SBRY.L> trailed a till-free grocery store in April, with shoppers using its SmartShop Scan, Pay & Go app. The shop still had a helpdesk for customers who wished to pay with cash or cards.

(Reporting by James Davey; Editing by Edmund Blair)