Amazon plans groceries push in Tesco threat

AMAZON is set to expand its fresh groceries operation in the US, and is reportedly plotting an international expansion that could spell trouble for the UK’s supermarkets.

The online retailing giant, which already runs AmazonFresh in its home town of Seattle, is planning to roll out the service to California imminently, and could expand overseas next year, sources close to the company told Reuters.

Although the company already sells thousands of dry food products online in the UK, fresh groceries remains one of the few areas of retail it has not touched. If it did expand the operation to the UK, it could steal a significant portion of the market away from the likes of Tesco.

Amazon traditionally operates on razor-thin profit margins, using its discount pricing to ensure customers come to the service in droves, so it could be in a position to undercut the UK’s supermarkets. The company did not comment on any plans to expand AmazonFresh.

Meanwhile, the firm signed its biggest ever TV streaming deal, inking a deal with US media giant Viacom to show a host of children’s shows on its online subscription service.

The company’s TV offering, which trades as Lovefilm in the UK, has won the rights to shows such as SpongeBob Squarepants and Dora the Explorer, after Viacom’s previous deal with arch-rival Netflix expired.

The multi-year deal includes other shows such as entertainment titles Jersey Shore and The Hills, although the children’s programmes are expected to be the biggest draw. Lovefilm, which Amazon purchased in 2011, says that its most popular shows are ones aimed at children.

The deal will come as a boost to Amazon in the fast-growing video subscription market, as it aims to compete with the likes of Netflix.

The agreement was reported as being worth $200m (£131m), but Amazon did not disclose a price.