Amazon launches online grocery delivery service

Amazon, the global online retailer, launched its food delivery service in the UK on Thursday, increasing market competition with established supermarkets.

Over 130,000 groceries will be offered by Amazon Fresh to customers in north and east London. Items include major brands and products form local producers. Shoppers will be able shop at lunchtime and receive the delivery as soon as 5pm. There are plans to expand the service to the rest of the UK but no date has been set.

This is the first food delivery service for Amazon outside the US, which has been running since 2007.

The company joins one of the world’s most developed online markets in the UK, competing with established supermarkets Tesco, Sainsbury’s, Asda and Morrissons.

Due to changing shopping habits, the growth of online shopping and the prominence of German discount supermarkets Aldi and Lidl, the British grocery market has been partaking in price wars.

Price wars between the major supermarkets have benefited customers but made it difficult for companies to make a profit. The service could test Amazon CEO Jeff Bezos’ thinking of keeping prices low to retain customer loyalty and increase market share by sacrificing profits.

However IGD, a retail research group, predicted that the market is likely to double to £17.2bn by 2020.

Bryan Robert’s a retail expert from TCC Global said: "While there is no cast-iron guarantee of success... I'm tempted to believe that we'll look back on today as something of a disruptive game-changer up there with the entry of Aldi and Lidl."

Vice president of Amazon Fresh Ajay Kavan said: "We are launching with a comprehensive offer in a limited area and will take our time to hone and improve our service.

“The bar in grocery retailing is exceptionally high. The supermarkets and grocers are among the very best retailers in the world. We will be very methodical and considered in how we roll this service out further in the UK."

The service is available through Amazon Prime which members pay £79 per year. There is a 30-day free trial and then £6.99 per month for Amazon Fresh.