Amazon Raises Pressure on U.K. Grocers With Pantry Serviceby
Beer, pet food among 4,000 everyday essential items available
Move provides fresh source of concern for British supermarkets
Amazon.com Inc. is giving Britain’s embattled supermarkets another challenge by introducing a grocery service for Amazon Prime members.
Amazon Pantry, which debuted in the U.S. about 18 months ago, will be available across the U.K. from today, the Seattle-based e-commerce giant said in a statement Friday. The online site will offer more than 4,000 everyday essential items from beer to pet food.
The move will provide a fresh source of concern for established supermarket chains such as Tesco Plc, and also for Internet-only grocer Ocado Plc. The industry’s profit margins are being pressured by a price war resulting from the expansion of German discounters Aldi and Lidl. J Sainsbury Plc said this week it sees no end in sight to the falling grocery prices that have weighed on sales and profitability.
The Amazon news weighed on Ocado shares, which were down 2 percent at 361.2 pence as of 10:55 a.m. in London. Sainsbury fell 0.3 percent, declining for a seventh straight day.
Amazon Pantry customers will be able to purchase a box of groceries weighing a maximum of 20 kilograms at a cost of 2.99 pounds ($4.55) for next-day delivery. If they exceed that limit in a single order, delivery of each additional box will be charged at a price of 99 pence.
“Amazon Pantry has been designed to take the heavy lifting out of replenishing the often bulky basics and store cupboard essentials that people need every day,” Helene Parthenay, Pantry manager at Amazon.co.uk, said in the statement.
Amazon Pantry is the latest extension of Amazon’s U.K. grocery services. Prime Now customers in the English cities of London and Birmingham can already buy chilled or frozen items through the service and some groceries have been available to purchase through its website since 2010.
Researcher Mintel forecasts U.K. online grocery sales will increase by 15 percent to 8.6 billion pounds this year.
(An earlier version of this story corrected the delivery timeframe.)