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Amazon takes on supermarkets with huge growth in groceries

Amazon has launched an assault on Britain's supermarkets with a sevenfold increase in the groceries it offers online in barely two years.

The internet retail giant only launched its groceries range, which includes tea, pasta and biscuits, in July 2010 with little more than 22,000 products. However, it now offers in excess of 150,000 products, from crisps to nappies, which are typically sold in bulk, as it attempts to gobble up sales from the high street.

Allan Lyall, the vice-president of Amazon's European operations, told The Independent on Sunday: "Grocery has completely met expectations and is growing great."

Online business accounts for just £5.6bn of the UK's £163.2bn grocery market, but it is growing rapidly.

While Mr Lyall said Amazon UK has "no plans" to launch fresh food, the massive expansion of its range is likely to set alarm bells ringing at the big supermarkets and loss-making online specialist Ocado,.

Their concern will have been heightened by recent revelations that Amazon reportedly delivered revenues of £3.3bn in the UK last year but paid no corporation tax on its profits. In Europe, Amazon is based in Luxembourg for tax purposes.

Andy Street, the managing director of the retailer John Lewis, said this month that the Government must "address the Amazon problem".

Mr Lyall, who declined to comment on tax, said the first Monday in December will be the busiest online shopping day this year.

Amazon, which has eight distribution centres in the UK, received orders for more than three million items – a rate of 35 a second – over 24 hours on the same day last year.