Friday 30 October 2015

Amazon Fresh - losing to win vs. Tesco?

We all know that the last thing UK mults need is loss-leading online competition, the only real growth area currently available, in an medium where shelf-space is not an issue....

Given that Amazon are feeling their way forward with a fresh offering in London and Birmingham to Prime members and have traditionally been prepared to operate at a loss to build share, they represent a very real threat to the major mults.., initially in major conurbations where Amazon's dense coverage is a major strength.

Add to this the fact that home delivery can cost £20/drop vs. the maximum charge a consumer will tolerate is £5, and the scale of the threat can be appreciated.

With their 50%+ share of online grocery, Tesco have most to lose, but any Amazon Fresh success will obviously also impact the other mults.

The issue for suppliers has to be the extent to which the mults will try to recover losses via traditional brands as they try to compete in a new online reality...

No comments: