The short answer is that Amazon will pose very little threat.
For starters, use of the Amazon service depends on being signed up for Amazon Prime, at a current cost of £79 a year, although there is a special offer of £59 for three days this week. Amazon won’t reveal how many Prime users it has in the UK, saying only that it is “millions”, but one would judge that it won’t be as many millions as are able to access online shopping without subscription handcuffs. Immediately the market opportunity for Amazon has shrunk.
Then there is the weird charging system for delivery. This goes by a price per box of £2.99p, with the ordering system telling you when your groceries are so bulky that they need to fit into another box, which costs 99p. Far less transparent than traditional online shopping where there is usually a set price up to a certain order value, and free thereafter.
And the Amazon service is limited to dry goods only. It does not offer fresh produce such as meat, fish, vegetables or fruit. So the shopper either has to leg it to the supermarket, or has to log in to a traditional grocer to complete their weekly order, wait in for two deliveries, and probably pay a charge because this second order does not meet the minimum criteria for free delivery.
So what are the benefits of Amazon’s service?
Prices are cheaper in some instances. 100g Nestle instant coffee costs £3.00p from Amazon versus £3.30p in Tesco. However, Kelloggs Cornflakes 750g are the same price. Amazon is not offering branded goods at Aldi or Lidl prices which might have been an attractive strategy.
Shopping online is supposed to be easy and convenient. With membership a prerequisite, a complicated delivery charge, and only offering half of the groceries that are needed in the home, Amazon is anything but convenient. It is not cheap either.