Amazon Fresh's UK grocery delivery service could be a 'major disruptor' for supermarkets next year

Amazon is expected to launch its grocery delivery service Amazon Fresh in the UK soon

Coming soon: Amazon Fresh is currently only available in a few US cities

Paul Sakuma/AP

20 October 2015

Amazon could become another thorn in the side of Britain's big four supermarkets if the launch of its grocery delivery service goes ahead as expected next year, according to consultancy Kantar Worldpanel.

Amazon has rolled out Amazon Fresh in some US cities, including New York and Philadelphia, and it is rumoured to be preparing a UK launch in the near future.

It's arrival would create another challenge for major supermarkets, such as Tesco, Sainsbury's, Morrisons and Asda, which are already dealing with the rise of discounters like Aldi and Lidl.

Kantar's Fraser McKevitt said Amazon's arrival into the currently underdeveloped online grocery space - only 18% of households bought groceries online in the last 12 weeks - could have a big impact.

"Amazon Fresh’s expected full launch early next year could be a major disruptor, bringing down average basket sizes, accommodating on demand shopping, and accelerating the growth of the whole online market,” he said.

McKevitt said all grocers could benefit from doing more to push online sales, because the convenience factor and minimum spend restrictions mean online shopping baskets tend to be larger at £67 on average, versus £14 in store. Online sales rose up 9.8% in the last three months.

The comments come as Kantar reported its latest grocery market share and sales figures.

Overall supermarket sales rose by a mere 0.8% in the 12 weeks to October 11.

McKevitt said consumers were pocketing the benefits of the supermarket price war rather than spending the difference on more items.

Each household saved £58 on average in the last year, meaning £1.5 billion has been taken out of the market.

Sainsbury's was the only one of the Big Four to see sales increase, with revenues up 1.1% thanks to strong online and convenience store performance.

Morrisons saw sales slip 1.7%, while Tesco and Asda's fell 1.7% and 3%, respectively.

Sales at Aldi and Lidi were both up 17.9%.

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