Amazon considers takeaway services after announcing food delivery deal with Morrisons

The US behmoth has jumped into a market that even the big four supermarkets have struggled to make profitable

Click to follow
The Independent Online

Put to one side its questionable tax status, independent bookshops being put out of business and warehouse staff being tracked on their toilet breaks: Amazon has completely changed the way we shop and offers an unparalleled service that makes it one of the most valuable companies in the world.

But rather than rest on its laurels, the US behemoth now wants to provide our weekly shopping too, jumping into the ferocious pit of online groceries that even the big four – Tesco, Sainsbury’s, Asda and Morrisons – have struggled to make profitable.

On Monday, Amazon revealed it has teamed up with Morrisons to sell food through its Pantry site, even offering fresh food to its Prime Now delivery service customers in five English cities.

Fancy a pizza, some ice cream, a new Xbox and a few games tonight? No problem: order it on Amazon by 5pm and it will be with you by 7pm. And if you don’t want to cook your pizza, Amazon is looking into offering takeaway services.

Just think about that: 20 years ago, you would have to head off to the supermarket, wait in the snaking lines to be told your item isn’t available, then head to Argos, hope what you want is in stock (and hope you are not getting ripped off with the same products cheaper elsewhere) and wait for an elf to fish it out for you. Get home, call up Domino’s, hope the guy taking your order can hear you over the noise of beeping pizza ovens, make sure you’ve remembered to get some cash to pay the delivery driver and hope he doesn’t judge you for attempting to eat a large meat feast all by yourself.


Delivery service Ocado's motto is "quality food that doesn't cost the earth" (Getty)

Amazon is also in the process of launching a clothing range. It is trying to sign up Marks & Spencer’s former head of womenswear and is recruiting fashion experts in the US. Add to that the extra services its Prime customers get, and Amazon could soon control virtually every aspect of our lives. It already has music, film and TV streaming services – and recently introduced the ability to download shows to watch on our commute to work, something even Netflix does not offer.

The Kindle is winning over even the most hardened of physical book fans, including a subscription service to more than 1 million titles and also has a lending library so other Kindle users can share. 

Sunday deliveries are now commonplace for Amazon, click-and-collect lockers are dotted around train stations, business hubs and shopping centres, while fishing through wallets and purses for credit-card numbers is no longer needed because the website has all our details.

We should not put anything past Amazon. Food delivery, however, is one area it has shown caution over. The Amazon Fresh service in the US was launched several years ago and is available only in a few locations. With an annual fee of $200 (£144) just for the deliveries, few in the UK are likely to stump up that sort of sum – especially when the priciest of the online grocers, Ocado, charges about £100 for an annual delivery pass.

The problem with food for Amazon is the price. Margins in supermarkets sit between 2 per cent and 5 per cent, compared with the typical margins on electricals (about 15 per cent) or clothes (as much as 70 per cent).

Throw into that the logistical costs – Amazon only offers one-hour delivery slots via its Prime Now service, at £6.99 a pop, compared with Tesco, which charges as little as £1.50 – the need for refrigerated vans and warehouses, and suddenly it becomes less attractive.

Supermarket shoppers have also abandoned the traditional weekly shop in record numbers, preferring to head to convenience stores on their way home from work for so-called “top-up” shops, which also makes the proposal tricky for Amazon.

One thing in its favour, however, is that most items sold by supermarkets online tend to be non-perishable food and drink, meaning Amazon could get away with stocking vodka bottles in its warehouses alongside hair-straighteners.

Amazon clearly thinks there is a future in selling us food. And, since it has managed to set the agenda over most of our shopping habits so far, it’s unlikely to miss out on the areas of our lives it hasn’t invaded.