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Amazon Fresh: UK Online Food and Grocery industry to be disrupted following Amazon entry

Amazon Fresh: UK Online Food and Grocery industry to be disrupted following Amazon entry

  • October 2016
  • 21 pages
  • ID: 4241980
  • Format: PDF
  • MarketLine


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Towards the end of 2007, Jeff Bezos of Amazon began experimenting with the idea of online fresh food delivery to customers in set regions of the United States. Nine years on and the online retailing giant has now launched the service in 128 postcodes within the UK, beginning its entry into the UK food market in June 2016. Quite brutally, this is Amazon's last mile quest for total retail domination when observing the number of sectors they now supply products in. The strategy has created instant worry for the large players dominating the industry with the likes of Tesco and Sainsbury's reviewing their own online food options, pricing and technicalities as they fight to maintain market share. Amazon's move into the online food segment is still in the early stages; however, any retailer should be apprehensive by what Amazon invests its capital and infrastructure in, as the company is not short of quick successes in industries that are new to them.

Key Findings
Explore Amazon's strategic efforts to disrupt the UK online food and grocery industry.

Reasons To Buy
What is Amazon Fresh?
Who are the market leaders?
Why has Amazon entered the market?
What might the future hold for Amazon Fresh in the UK?

Key Findings
The online food and grocery industry within the UK is growing at a much faster rate than that of the offline market. Amazon being a tech giant that aims to sell a diverse range of products and most recently food, it has noticed this potential and understood it to be an attractive market. With a number of dominating players already well established in the market, Amazon causes trouble as rivalry is set to increase.

While there has been some bad press surrounding the recent launch in June 2016, most feedback has generally been positive and the company aims for it to only improve on what it was renowned for regarding some early logistical mistakes. With Prime subscriptions growing at a very fast rate, it is a reflection that more shoppers are aware of the benefit it holds in granting them access to Amazon Fresh and its services. With a partnership of suppliers including the likes of Morrison's, the company will not be light on quantities and will supply households with brands in conjunction with localized farm fresh food produce, which may be preferred by many.

While it is likely Amazon Fresh will have its share in the years to come, the ride will not be smooth and must prepare for UK customer loyalties that are already well present.

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