Budgens, known for its local food stores, has pulled its online sales service just a year after it began.
The Web service was scrapped after £1.2m of investment last year only returned a minimal number of new customers.
Rod Alexander, Budgens' corporate communications partner, said, "The costs of bringing in new customers were great and the marketing costs were astronomical, so after a year we've decided to cut our losses."
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He added that as Budgens ran local community food stores, customers probably had little need for an online shopping service when the stores were situated very close by anyway.
He also suggested that customers who were interested in online shopping would probably prefer to buy from large well-known companies like Tesco.com.
But Alexander said the loses were not as significant as they could have been, as the system was set up on the back of Teleshop - an online local authority service which delivers food to infirm people - that Budgens bought two years ago. This service is still running.
The infrastructure of the Teleshop enterprise meant that Budgens already had two specialised online depots and only had to build a third.
In contrast to Budgens' decline, Tesco.com - one of the UK's largest online retailers - is going from strength to strength and is expanding its Web business to include electrical items.
Tesco.com is said to receive 60,000 orders a week, generating sales of £5m.