Amazon Prime customers will be able to order grocery deliveries to their home for free, the e-commerce giant announced today, in a huge blow to high street supermarket giants and small retailers.
The tech titan will roll out free deliveries via its Amazon Fresh grocery service to Prime subscribers across 300 postcodes from today, with same-day slots available in some areas.
Amazon Fresh will give customers free two-hour food delivery slots on orders of more than £40.
Amazon’s groceries arm currently stocks around 10,000 different products across its fresh, chilled and frozen food ranges.
The offer will initially be available to customers in London and the home counties, including around 40 postcodes in Surrey. However, the retail giant hopes to roll out its same-day slots, which provide deliveries by midnight if you order before 9pm, to “multiple cities” by the end of the year.
It is understood that Prime members in Birmingham, Manchester and Edinburgh will be among the first to benefit from the wider rollout towards the end of 2020.
“Grocery delivery is one of the fastest growing businesses at Amazon and we think this will be one of the most-loved Prime benefits in the UK, ” says Russell Jones, country manager of Amazon Fresh UK.
Jones denied that Amazon was cashing in on the coronavirus crisis, adding that the move had been on the cards well before lockdown.
“We’ve been planning this for a long time. It’s a big step up in volume. In the early days of lockdown all our capacity was being used. We’re confident that we can launch this service now at this point in time,” said Jones.
It comes as online food sales have almost doubled during the pandemic with traditional grocers struggling to keep up with demand.
Recent data from Nielsen showed that online grocery sales jumped 92 per cent in the four weeks to 12 July, causing a sharp spike in market share from seven per cent at the beginning of lockdown to 13 per cent this month.
Industry figures have heralded the move as “extremely significant” for the $1.5 trillion (£1.2 trillion) tech giant, but warned that it could drown out smaller rivals.
Retail analyst Richard Hyman said the move signalled Amazon’s confidence that it can monopolise on the burgeoning online delivery market.
“I think they will be a big player in food retailing online. They wouldn’t be doing it otherwise. Most of the markets they go into, they want to be the biggest player,” said Hyman.
“The frightening thing for everybody else is that they all really need to make money, whereas Amazon doesn’t and that places them at an enormous advantage.”
However, investors in grocery sellers including Marks & Spencer and Ocado shrugged off the news, with shares rising 1.3 per cent and 0.9 per cent respectively.