Amazon may be about to take on Ocado, Tesco and Sainsbury’s by entering the online supermarket business.
The retail rumour mill has gone into overdrive upon news that Amazon has taken on a lease for a warehouse perfect for storing food.
Trade magazine Retail Week reported that Amazon has agreed a 10-year lease on a building in Weybridge, Surrey previously used by Tesco.
The location of the warehouse, just inside the M25, would put Amazon in prime position to deliver fresh food to London households.
Is Amazon about to move into the online grocery delivery market?
Amazon Fresh
There have long been rumours that Amazon plans to launch an online grocery service in the UK – it’s been delivering food shopping in the US for several years under its Amazon Fresh service.
According to Retail Week, the lease on the Weybridge warehouse will begin sometime next month. At 304,751 sq.ft, the building is similar in size to Ocado’s first warehouse in Hatfield.
It’s also been reported that Amazon has presented its grocery plans to major food manufacturers in Britain and could launch the service as early as next month.
Amazon has stepped up its investment in UK delivery services in recent months. It now offers Sunday deliveries, and one-hour delivery on more than 20,000 products in London and Birmingham.
Amazon’s US offering
[SPOTLIGHT]Over the pond Amazon has been offering grocery deliveries to selected areas for the past eight years.
It trialled the service in a Seattle suburb in August 2007 then expanded to other parts of the city. It launched in Los Angeles in June 2013 offering same-day and early morning deliveries.
Since then it’s started to offer services in parts of San Diago, Philadelphia and New York City. Consumers can also use Amazon to order food from local shops and restaurants.
Amazon Prime members can also buy products via Amazon Dash, which is a Wi-Fi connected device that ensures you never run out of various essential items such as food, drinks and baby products.
UK competition
The launch of Amazon Fresh would pit Amazon directly against Ocado, which is the biggest online-only grocery retailer in Britain.
In contrast to other supermarkets, Ocado doesn’t have any physical stores and does all its home deliveries from two warehouses. Ocado's products include own brand groceries from Waitrose as well as its own Ocado brand.
Amazon Fresh would also be competing against the home delivery operations of the UK’s big supermarkets: Sainsbury’s, Morrisons, Asda, Waitrose, and Tesco.
Competition between the big players is already intense with all the supermarkets keen to lure customers in.
Waitrose is currently giving free champagne to new customers trialling the service, Ocado is offering £20 off your first order over £80, and Tesco £12 off an initial order of more than £60.
Read How to slash your supermarket delivery costs.
What do you think? Would you welcome Amazon launching Amazon Fresh in the UK? Or do you prefer to stick to established supermarkets? Let us know your thoughts below.
Earn more loyalty points on your shopping with a supermarket credit card
More on groceries:
How to slash your supermarket delivery costs