Melons and pineapples? Who cares? It will take more than that for supermarkets to fight off AmazonFresh

City A.M.
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Tesco must worry about more than melons and pineapples (Source: YouTube)

Tesco’s current ad features a couple debating whether or not to drive to their local branch to exchange a melon for a pineapple.

“We need an excuse,” says the husband. “What? Like I’m long-sighted and I mistook it for a large grape?” replies the straight-thinking wife. The commercial highlights the supermarket’s “No Quibbles” policy. Bought a melon and decided against it? Get a pineapple instead - no sweat.

Meanwhile, Amazon has been busy changing the face of online grocery shopping. With the launch of AmazonFresh here in London, those in almost 70 central and eastern postcodes can use the site to order goods from 130,000 shops and producers across the capital - and have their items on the doorstep within an hour.

Supermarkets have been used to looking over their shoulders in recent years as German discounters Aldi and Lidl hoovered up sales: the market share held by the Big Four has dropped from more than three-quarters to just over 70 per cent since 2014, according to Kantar Worldpanel. But Amazon’s appearance in the market not only means they need to make room - it means they need to innovate, too.

It is not as though UK grocers hadn’t received fair warning: AmazonFresh first launched in Seattle in 2007, although it was not until 2013 that it was expanded, first to LA, then San Francisco, Brooklyn and beyond. Last year, research from Cowen & Co suggested Amazon had a 22 per cent share of all the food and beverages sold online - a market worth $33bn (£22.7bn).

Amazon may be a goliath, but it is also remarkably agile - it has fingers in pies from ebooks to film making. By contrast, the Big Four have spent the last few years wringing their hands about who can undercut whom by a few pence.

If supermarkets are to protect themselves, they could do much worse than to imitate Amazon. They must innovate fast, or face losing market share to technologically savvy rivals who are more in tune with what customers need. Forget about melons and pineapples: it is time to concentrate on the big stuff.