Amazon Fresh launch ‘could be trouble for Ocado’
The fresh grocery delivery service could become operational in the UK as early as September, said a spokesperson from the e-commerce and delivery firm ParcelHero David Jinks.
Consumers in some US cities have been able to use the service for some time, while the UK and Germany are next in line for the “speedier version of Ocado”, he added.
Reports in the Times last week quoted one industry insider who claimed Amazon Fresh would target 2% of the UK’s £149bn grocery market, which is three times the market share of the UK’s biggest online-only grocer, Ocado.
One main difference between Amazon’s offer and that of established UK services, such as Ocado, was that Amazon would team-up with local businesses, such as delis and bakeries, to widen the range of local produce, Jinks said.
Amazon would launch Fresh in London first
What Amazon is likely to do:
- Launch in London first
- Make a swift entry
- Try to take 2% of the grocery market (£1bn)
- Link with local grocery businesses
Source: ParcelHero boss David Jinks
Amazon would launch the Fresh proposition in London first, predicted Jinks, who said the company’s distribution network in the UK’s capital was vast and mature enough to make the introduction swift.
“Having its own distribution network enables Amazon to bypass traditional suppliers, such as Royal Mail, and ensure its Prime [premium] members get a wide choice of delivery options, including same day deliveries in areas of the capital,” Jinks explained.
The Fresh service would deliver a selection of fresh, frozen and prepared foods to customers, either the same day the order was placed or the day after, he added.
“Amazon has been developing its own logistics network for some time and now has the capacity to deliver change in this sector of e-commerce.
“It has already rolled out Amazon Fresh in its home town of Seattle and in areas of California and New York, but it makes greater sense in urban areas of the UK where the take-up of grocery delivery has been far swifter than in the US.”
Rising above 5% in the UK
Less than 1% of grocery sales in the US were made online, whereas that figure was quickly rising above 5% in the UK, Jinks added.
Meanwhile, Amazon UK vice president Doug Gurr forecast the launch of Amazon Fresh in the UK at a conference last year, after the format was rolled out in the US.
“We have just started rolling that out across America and it is now available on the West Coast,” he told delegates at a City Food Lecture in London.
“This is not a forward statement of plans because we do not make those. But if you look at the history of what Amazon tends to do, our model tends to take something and try really hard to make it work and then, when we think we have got it right, start rolling it out.”
Amazon would neither confirm or deny whether it planned to rollout Amazon Fresh in the UK.
