Amazon Fresh: UK Online Food & Grocery industry to be disrupted following Amazon entry

Amazon Fresh: UK Online Food & Grocery industry to be disrupted following Amazon entry


Towards the end of 2007, Jeff Bezos of Amazon began experimenting with the idea of online fresh food delivery to customers in set regions of the United States. Nine years on and the online retailing giant has now launched the service in 128 postcodes within the UK, beginning its entry into the UK food market in June 2016. Quite brutally, this is Amazon's last mile quest for total retail domination when observing the number of sectors they now supply products in. The strategy has created instant worry for the large players dominating the industry with the likes of Tesco and Sainsbury’s reviewing their own online food options, pricing and technicalities as they fight to maintain market share. Amazon's move into the online food segment is still in the early stages; however, any retailer should be apprehensive by what Amazon invests its capital and infrastructure in, as the company is not short of quick successes in industries that are new to them.

Key Findings

Explore Amazon's strategic efforts to disrupt the UK online food & grocery industry.

Reasons To Buy

What is Amazon Fresh?
Who are the market leaders?
Why has Amazon entered the market?
What might the future hold for Amazon Fresh in the UK?

Key Highlights

The online food and grocery industry within the UK is growing at a much faster rate than that of the offline market. Amazon being a tech giant that aims to sell a diverse range of products and most recently food, it has noticed this potential and understood it to be an attractive market. With a number of dominating players already well established in the market, Amazon causes trouble as rivalry is set to increase.
While there has been some bad press surrounding the recent launch in June 2016, most feedback has generally been positive and the company aims for it to only improve on what it was renowned for regarding some early logistical mistakes. With Prime subscriptions growing at a very fast rate, it is a reflection that more shoppers are aware of the benefit it holds in granting them access to Amazon Fresh and its services. With a partnership of suppliers including the likes of Morrison's, the company will not be light on quantities and will supply households with brands in conjunction with localized farm fresh food produce, which may be preferred by many.
While it is likely Amazon Fresh will have its share in the years to come, the ride will not be smooth and must prepare for UK customer loyalties that are already well present.

UK Online food industry shows potential, appeals to Amazon whose entry increases rivalry
Current market performance is strong with further growth forecast
Offline is larger but online growth is faster
It is an attractive market for Amazon indeed
Rivalry set to increase
‘The Giant has arrived… Save us!’
Amazon Fresh has steadily expanded
Amazon Fresh beats competitors on price
Lower prices you scream? Let’s shop from there!
Not all praise for Amazon Fresh since launch day
Fresh is in the name, but early signs say otherwise
Turning up at customers door steps when nobody is home
Established brand provides opportunities to build supplier base & offer unique propositions
Amazon brand shows signs of growing subscriptions as it continues strategic moves
Fast growing Prime subscription is a must for Amazon Fresh
Just another Amazon category
Good supplier network is vital
Branded products alongside local fresh produce
Morrisons grabs a second chance with Amazon Fresh
Other suppliers have recently started supplying Amazon
Fresh brings faster delivery, lower overheads and more experience
‘One hour delivery’ gives Amazon a head start
Experience is more valuable than anything else
More flexibility and lower overheads
Future of Amazon Fresh looks bright but it must prepare for a rocky road
Predictions that are based on US performance will strongly differ in the UK
Amazon Fresh is due to cause disruption but that is as far as it may go
Further Reading
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About MarketLine
List of Figures
Figure 1: Online and Offline segment market value (£bn)
Figure 2: UK online food retail market share 2015 (% of total value)
Figure 3: Amazon and Tesco price comparison
Figure 4: Amazon Worldwide Prime subscription memberships in millions (Dec-13 – Jun-16)
Figure 5: Amazon Fresh delivery drivers in preparation for deliveries

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