Amazon Enters Online Grocery Space in U.K. with Morrisons Tie-up

Amazon is aggressively venturing into the food delivery space outside of its home turf, the United States. The e-commerce giant has now announced a fresh tie-up with British supermarket, Morrisons, to deliver both frozen and fresh food to consumers in the U.K. In certain locations, the ecommerce giant promises to deliver food in as less as an hour.

This new business model will enable Amazon to compete with some of the largest supermarkets in the country, as well as the smallest of greengrocers – a market worth GBP178 billion. In a space marked by brutal price wars, Amazon’s entry could roil things unpredictably. Currently, the grocery sector in the U.K. is dominated by names such as Tesco, Walmart’s Asda, Aldi, Lidl, Sainsbury, and Ocado, which is an online food specialist.

How will the American Behemoth Impact Online Retail in the U.K.?

The U.K. boasts of one of the most developed ecommerce markets, making Amazon’s entry into this space a challenge it will have to tackle carefully. Market analysts opined that Amazon jumping in to participate in the U.K. grocery market will cause a churn in the market. Add to that the fact that the new entrant is none other than an American ecommerce behemoth.

While the other companies in the British retail space are now bracing for the impact of this new development, Morrisons’ shares rose as news of the tie-up trickled in. The shares of online specialist Ocado, however, fell 9.3% as the chances of Amazon buying Ocado now look thin. The company has thus far not managed to impress market watchers with its online sales capabilities – something that its tie-up with Amazon could now drastically change. In fact, for nearly three years now, Morrisons has outsourced its online food business logistics to Ocado.

Retail Industry Moving Online Could Cost 900,000 Jobs in the U.K.

Companies in the U.K. grocery market have employed several marketing and promotion strategies to please increasingly thrifty shoppers, causing the market share of discounters such as Lidl and Aldi to expand. While the U.K.’s grocery industry moving online could mean more convenience and deals for shoppers, it could also kill a predicted 900,000 jobs by 2025, according to The British Retail Consortium.


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