How Amazon plans to take on supermarkets

How Amazon plans to take on supermarkets

The Amazon Fresh service will now start delivering groceries for free for Amazon Prime customers.

In a move that will see it expand into the market, the tech giant will offer same or next-day grocery deliveries for customers in London and in the southeast.

During the lockdown, supermarkets struggled to keep up with the surge in demand for online grocery shopping. Online food sales were seen to have almost doubled during the pandemic – and Amazon is keen for a slice.

Russell Jones, country manager of Amazon Fresh UK, said: “Grocery delivery is one of the fastest-growing businesses at Amazon and we think this will be one of the most-loved Prime benefits in the UK.”

“We’ve been planning this for a long time. It’s a big step up in volume. In the early days of lockdown, all our capacity was being used. We’re confident that we can launch this service now at this point in time,” he added.

Why is this significant?

The online retailer has seen demand reach new highs as it became a key retailer over lockdown for many stuck at home.

Consumers spent over $11,000 a second on Amazon products and the share price grew by a third in one month during the height of the pandemic.

Retail analyst, Richard Hyman, said: “[Amazon] can be compelling, disruptive and it’s a business with gigantic ambitions.”

“I think they will be a big player in food retailing online. They wouldn’t be doing it otherwise. Most of the markets they go into, they want to be the biggest player. “The frightening thing for everybody else is that they all really need to make money, whereas Amazon doesn’t and that places them at an enormous advantage.”

Shares in Amazon (NASDAQ: AMZN) are trading up 1.54% at 3,055.21 (0830GMT).