Amazon set to shake up the online grocery market

Alastair Lockhart

Tue 28th Jul 2020

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Amazon is set to substantially scale up its online grocery business – Amazon Fresh.

Fresh is currently available in London and the Home Counties to Amazon Prime customers who pay an additional fee. From next Tuesday however, the service will be free to Prime subscribers spending more than £40. In addition, Amazon has said it plans to roll the service out to multiple cities by the end of this year.

Fresh has been a slower burner since its 2016 launch, gaining only marginal market share. However, Amazon has been working hard behind the scenes with key suppliers for the past few years, and will no doubt see recent rapid growth in the online grocery market as an ideal opportunity to scale up its operations.

Our research suggests that shoppers are keen. Savvy Shopper Panel insight highlights that 70% of UK Prime members would be happy to buy food and drink from Amazon and 67% would trust Amazon to deliver fresh food.

Savvy’s broader research finds that a substantial 87% of UK consumers have shopped at Amazon during the past year with half having used the retailer in the past month. What is more impressive than the proportion of shoppers that use Amazon, is the high regard in which they hold the online giant. While shoppers are typically cynical of large businesses, Amazon appears to be an exception. 77% of shoppers cite the online retailer as a business that they trust and 72% say Amazon is their first port of call for buying items online.

While the precise details of Amazon Fresh’s imminent plans remain limited at present, be in no doubt that Amazon’s expansion in this market will be highly disruptive for shoppers, suppliers and competitors alike.

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