The last thing British supermarkets need is for retail behemoth Amazon to start selling and delivering food to Brits. The industry is already struggling to deal with the reduced profit margins introduced by online food shopping and delivery services, and competition from two private German companies called Aldi and Lidl intent on slashing prices and stealing market share.
But it looks like Jeff Bezos is poised to bang another nail into the British grocery market's coffin.
Retail Week reported on Monday that Amazon has signed a 10-year lease on a former Tesco warehouse in Surrey; the trade publication said the move is "the clearest indication yet" that Britain is about to get the "Amazon Fresh" food service, which currently serves Seattle, Los Angeles, San Francisco, San Diego and New York City.
Amazon briefly surpassed Walmart recently as the world's biggest retailer by market value; with a market capitalisation of almost US$250 billion, it can afford to spend whatever it takes to elbow its way into the U.K. supermarket industry, which is already "the world's most advanced and competitive home delivery grocery market," according to David McCarthy, an equity analyst at HSBC.
Tesco, Sainsbury, WM Morrison, Waitrose and Asda are trapped in a price war amid a sustained bout of deflation that's savaging their businesses.