Fresh start for London

Fresh start for London

Amazon has today (9 June) launched its Amazon Fresh grocery delivery service in 69 Central and East London postcodes. Amazon Prime members in the eligible areas can now order from a range of over 130,000 products – including fresh fruit, vegetables and meat- and opt for one-hour or same-day delivery.

One-hour delivery slots are available from 7am to 11pm, seven days a week, with same-day delivery available from 5pm for orders placed by 1pm. AmazonFresh is available via the Amazon.co.uk website or mobile app.

Prime customers in the eligible London postcodes can sign up now for a 30-day free trial of AmazonFresh. Thereafter, AmazonFresh will be available to Amazon Prime members for £6.99 per month with unlimited delivery for orders above £40.

“The bar in grocery retailing is exceptionally high. The supermarkets and grocers are amongst the very best retailers in the world,” said Ajay Kavan, Vice President of AmazonFresh. “We believe that the key to the long term success of AmazonFresh is to bring together the low prices, vast selection, fast delivery options and customer experience that Amazon customers know and love.”

Kavan added: “We are launching with a comprehensive offer in a limited area and will take our time to hone and improve our service based on our learnings and feedback from our customers.

“We will be very methodical and considered in how we roll this service out further in the UK.”

This is Amazon’s latest step in the food and drink sector. Amazon started its “Grocery Store” in 2010 and in November 2015 it launched Amazon Pantry – a nationwide one-day delivery service for Prime members (with a fee of £2.99 for the first box, and 99p for additional boxes on the same order).

A range of fresh, chilled and frozen items is also available for Prime members through Amazon.co.uk’s Prime Now service, which offers one-hour delivery or free delivery within a choice of two-hour same day delivery slots to customers in London, Surrey, South Yorkshire, Manchester, Birmingham, Newcastle, Liverpool, Leeds, Portsmouth and their surrounding areas.

Amazon Fresh is already up and running in the US, where Prime members pay annual fee of $299 (which is quite a bit more than the £6.99 monthly fee that UK Prime members will be paying for the Fresh service).

As Kavan pointed out, the UK’s grocery delivery sector is already highly competitive and the big supermarkets have all invested heavily in home delivery and click and collect services. One of the key supermarkets, Morrison’s, has taken an interesting position: it works with both Ocado (the UK’s leading online grocer) and also Amazon, providing goods for the Prime Now and (as from today) the Fresh service.

Analysts have speculated that the UK launch for Amazon Fresh will shake up the market, and may be unwelcome (though hardly unexpected) news for Ocado.

Connor Campbell, a senior market analyst at www.spreadex.com, told Post&Parcel this morning: “Ocado’s worst nightmare, the launch of Amazon’s Fresh service, has arrived in London, the US giant testing out 69 postcodes before expanding to the rest of the city. The announcement of the service, which is in partnership with struggling supermarket Morrisons, has been responsible for much of Ocado’s woes in 2016, though Spreadex clients have begun to buy the stock since it crept towards £2.50  in anticipation of the company’s half year update at the end of June.

“Whether Amazon Fresh poses a genuine threat to Ocado is unclear; however, if any company has the clout to muscle into the fractured supermarket sector it is Amazon, with its well-established delivery services providing the perfect base for this food-based expansion.”

 

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