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Amazon’s grocery delivery plans come to fruition

09 June 2016 - 09:11 by Graham Miller

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The rise of Amazon as a force in the UK retail market has been unstoppable over the past two decades. But until recently it has stayed out of the fight for the food market, leaving traditional supermarkets to compete over the ability to sell groceries via safe shopping online.

This will all change in the next few weeks, with the Financial Times reporting that the firm is on the cusp of introducing its Amazon Fresh service to British customers.

Prime Now has made certain consumables available already, but this range has been limited to refrigerated items, not the full gamut of food that people can expect to purchase via e-commerce sites from Tesco, Sainsbury’s and other companies.

With Amazon Fresh allegedly on the verge of being announced in the UK, industry insiders are convinced that even with the retailer’s massive resources, it will have a difficult time cracking the market here.

One of the reasons for this is the sheer level of competition between supermarkets, with prices falling by four per cent since 2014 and further reductions likely to be implemented when Amazon enters the fray.

It has also been pointed out that while Amazon may make tens of billions of pounds a year from its global operations, it rarely turns much of a profit. Instead, it invests the majority of its earnings into projects which hope to expand its influence beyond safe shopping online.

Amazon Fresh in the US comes with an annual fee of around £200 for those who want to receive items delivered direct to their door. This could be another barrier to its success, albeit one which Amazon has the power to overcome if it integrates the service with its Prime subscription package, rather than charging extra for food shopping.