Tesco is an example of a company that has diversified too far. You’re lucky to get a basket, staff are miserable and a product return can take 45 minutes. Morrisons seems focused, and does what it does well. I wouldn’t want it to diversify too far.
I can’t see how bad it is to move towards non-food and online. Most of the grocery retailers have done it, causing a pain to the original retailers, which now consider Sainsbury’s as a low-price competitor.