Amazon has launched its AmazonFresh food delivery service in the UK, a long-anticipated move by the world’s largest online retailer to break into the UK grocery market.
According to Reuters, Amazon’s arrival in the market comes at a tough time for the supermarkets. They’re already fighting a price war sparked by discount rivals Aldi and Lidl. That has sapped profits across the sector. But it may also have helped the grocers prepare for battle.
REUTERS Retail Correspondent, James Davey, said:
“It’s much more profitable for the retailers for customers to visit their stores than if they do it online, so make their stores more attractive, improve product availability, improve customer service – do a lot of the things they’re already doing to answer the threat of the discounters.”
Watch the AmazonFresh Launched in UK Video from Reuters:
The report also claims that “this is what the UK’s big supermarkets have been dreading. It’s aiming to grab part of a booming market. UK online food shopping expected to double to over 17 billion pounds a year by 2020. The Amazon Fresh service just a trial for now, and confined to parts of London.”
Senior FX Strategist, RABOBANK, Jane Foley, said:
“I think the supermarkets are likely to be quite concerned in the UK. We’ve known for some years that there’s been on-off price wars, a lot of pressures within the sector. So to have another big player who already has a very established delivery base will be obviously a significant concern to many of the incumbents in that space.”
Supermarkets hope point card programs also give customers a reason to stay loyal. But Amazon has a history of disrupting every market it enters. Thursday’s launch may just be an initial skirmish, but battle has been joined.