Amazon piles pressure on supermarkets with fresh-food launch

Britain's embattled traditional supermarkets are to come under renewed pressure as internet giant Amazon moves onto their turf.

From today, subscribers to the Amazon Prime service living in select postcodes in north, east and central London will be able to upgrade to order deliveries from a range of around 130,000 groceries.

Amazon Fresh will be available for a monthly fee of £6.99, on top of the £79 annual Amazon Prime subscription, and offers unlimited deliveries on orders above £40, reports The Guardian.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

One-hour delivery slots will be offered to 69 postcodes, with same-day delivery available on orders placed before 1pm.

It is a modest toe-dipping launch and the future roll-out across the country will be "methodical and considered", says vice president Ajay Kavan.

However, analysts cite concerns for the "big four" supermarkets, which are already fighting a rear-guard action against discounters Aldi and Lidl. Reuters reports comments from investment firm Bernstein that in the short term, the focus on London and the south-east could impact Sainsbury's in particular.

Sainsbury's £1.4bn buyout of Argos is seen as a pre-emptive defensive move to boost its own delivery capability and expand beyond its core food offering.

Amazon's entry will also pose a threat to Tesco and Ocado, which control a big share of online orders in the capital.

However, Morrisons stands to gain from the launch, even if it loses share in the longer-term through a nationwide roll-out, because it will be supplying the fresh and frozen products sold by Amazon.