Amazon Australia makes first foray into groceries

Amazon has launched a new online store that will put Coles and Woolworths on notice. Photo / 123RF

Amazon Australia has fired its first shot at supermarket giants Coles and Woolworths.

The e-commerce juggernaut's entry into the Australian market in December last year left consumers underwhelmed but the "land and expand" strategy of the US-based company is starting to take shape.

Today, the company announced it will offer customers food and beverages on its Australian online store such as tea, coffee and tinned goods as well as specialty, health and organic foods.

Under new category Pantry Food and Drinks (the 27th category on the Australian site), users will be able to buy familiar local products like Arnott's biscuits, Uncle Tobys cereals and bars, Milo, T2 teas, Masterfood condiments, Sanitarium cereals and international brands including Oreo, Powerade and M&Ms.

The new products will appear alongside categories such as Pet Supplies, Travel, Automotive and Jewellery, which Amazon Australia launched last month.

"Since the launch of amazon.com.au in December of last year, we have been focused on growing selection and services for Australian customers," Rocco Braeuniger, country manager of Amazon Australia, said in the announcement.

"Today we are delighted to add to the over 80 million products already available on the store with the launch of Pantry Food and Drinks, bringing greater convenience to customers, underscored by everyday brilliant value and fast delivery."

The company says it is looking to cater to a growing health food trend in Australia and support local health food entrepreneurs.

It's expected that Amazon will start selling fresh food and produce to Australian customers once the company bolsters its refrigerated supply chain.

In a statement put out by Amazon, Luke Hopkins, director of the Sydney-based Protein Bread Co, welcomed the arrival of Amazon's food category.

"(We are) incredibly excited to be working with Amazon Australia for the launch of its new category, Pantry Food and Drinks," he said.

"We're passionate about a fitter, healthier, happier Australia and Amazon will be a pivotal partner in bringing this dream to life by extending our healthy high protein and low carb baking mixes to a broader, national audience."

To better compete with the looming challenge from Amazon, Woolworths and Coles have been investing in new technologies and working to boost their online stores, distribution and delivery capabilities.

Last month, Woolworths kicked off a trial of its new digital basket "scan and go" system at one of its Sydney stores. After downloading a special app to their phones, customers can simply scan items they collect and pay by tapping out at a designated pay station before they leave.

Meanwhile Coles recently announced it is allocating millions of dollars to automate distribution centres in the coming years.