Amazon Expands U.K. Same-Day Delivery Offer to Include Chilled, Frozen Items
September 29 2015 - 10:24AM
Dow Jones News
By Saabira Chaudhuri
LONDON--Amazon.com Inc. (AMZN) is expanding its same-day
delivery service in the U.K. to include items like butter and
cheese, a move that comes as the online retailer is widely expected
to launch a full grocery service in the country.
Amazon already offers a range of ambient products like toilet
paper, diapers, water and coffee to members of its Prime service in
Birmingham and London. The company said on Tuesday it was expanding
that offering to include a small range of chilled and frozen items
in those cities.
Online grocery shopping makes up roughly 5% of the U.K.'s
grocery market at present, and that share is projected to increase
to 8.6% by 2020, according to the Institute for Grocery
Distribution.
U.K. media have for months reported that Amazon--which last year
reported a $241 million loss on $89 billion in sales--is well on
its way to launching an online grocery offering that would include
fresh food in the U.K. The company has repeatedly refused to
comment.
In the U.S., Amazon sells perishable groceries through its Fresh
grocery delivery service, which offers things like fresh fruit,
meat, ice cream and milk across a handful of cities.
If Amazon does launch a full-fledged grocery offering in
Britain, it would go head-to-head with the country's four largest
grocery chains, all of which offer a home-delivery service or click
and collect, where customers order online and pick up from a store,
gas station or some other location.
Amazon's entry is expected to exacerbate an already vicious
price war in the U.K., with grocers competing furiously for
customers who are increasingly being enticed by discount grocers
Aldi and Lidl. Amazon would also be competing with online-only
grocer Ocado.
"Amazon clearly is focusing on the immediacy of its delivery
solution rather than providing a broad grocery range initially,"
said Exane BNP Paribas analyst John Kershaw. "Until Amazon Fresh
offers a broad chilled, frozen and ambient range, plus a selection
of branded and own-label products at compelling prices, we'd not
expect Amazon Fresh to be disruptive."
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 29, 2015 10:09 ET (14:09 GMT)
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