Amazon’s Grocery Market

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Amazon has entered the UK grocery market but instead of taking on the country’s supermarkets head on, it has struck with heavyweight supermarket Morrisons.’

With Morrisons, Amazon will be able to add fresh and frozen products to its existing offering of packaged grocery goods, allowing it to take on Tesco, Sainsbury’s and Wal-Mart’s Asda, as well as online specialist Ocado.

For Amazon, it’s an opportunity to boost the popularity of its Pantry service on the other side of the Atlantic.

Under the model, Amazon’s Prime subscribers can remotely order from thousands of products for next day delivery.

The products will also be available through Prime Now which is a one hour delivery service.

The deal is a significant boost for Morrisons, Britain’s fourth largest supermarket, which has struggled with online sales to the point where it’s had to outsource its own online food business to Ocado.

Amazon launched a fresh food offering in Seattle in 2007 and has since been offering it in a handful of other US cities.

But the struggle for Amazon has been finding the best pricing model, with fresh food proving one of the toughest markets to cover.

The deal with Morrisons could be the answer in the UK’s grocery market already hammered by price wars with discounters Aldi and Lidl stealing market share from the incumbents.

 

 

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