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UPDATE 2-Amazon steps up competition in UK online grocery sales with faster, free delivery

Tue, 28th Jul 2020 13:23

* Free grocery deliveries for Prime members

* Aims to eventually roll-out service to all of UK

* Company lowers minimum order value
(Adds analyst comment)

July 28 (Reuters) - Amazon will begin free and
same-day deliveries of groceries in London for its 'Prime'
members from Tuesday, as it looks to cash in on fast-growing
demand for buying essentials online, a trend that has been
boosted by the coronavirus lockdown.

Customers with a 'Prime' subscription can order meat,
produce, snacks and other household essentials from Amazon UK's
'Fresh' service in two-hour windows for orders above 40 pounds
($52), the e-commerce giant said https://amazonuk.gcs-web.com/news-releases/news-release-details/fast-grocery-delivery-now-free-prime-starting-today-london.

Amazon said the service, which it aims to implement across
the United Kingdom by the end of the year, applies to around 300
postcodes. The minimum order value for Prime customers has also
been lowered to 15 pounds from 40 pounds.

Orders made before 9 p.m. will be delivered the same day in
most areas, it said.

"Amazon is not widely considered as a food supplier in the
UK so it will take time for the company to build a brand
presence in the business and make its presence felt," AJ Bell
investment director Russ Mould said.

"But the company has deep pockets, huge ambitions and an
uncanny habit of emerging as a leader in its targeted fields."

Amazon has been tapping into this sector since 2016, when it
first launched its 'Fresh' service, although it has been selling
food and drinks since the launch of its grocery store in 2010.

The lockdown has led to changing consumer behaviour with
nearly one in five British households now buying over the
internet, market researcher Kantar said last month.

Kantar said earlier this month that although grocery sales
have been rising year-on-year, the pace of growth has slowed
compared to previous weeks since lockdown restrictions eased.

Internet supermarket group Ocado forecast earlier
this month that online grocery shopping will double its share of
the UK market over the new few years, building on a huge
increase during the lockdown.

It is unclear how Amazon's new plan will affect its
collaboration with Morrisons, which allowed customers to
order from the supermarket and have it delivered by Amazon.

($1 = 0.7765 pounds)

(Reporting by Pushkala Aripaka and Tanishaa Nadkar in
Bengaluru; Editing by Krishna Chandra Eluri and Susan Fenton)

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