Amazon is scrapping grocery delivery charges for its Prime customers in the UK in a move which could see it establish a major foothold in the UK grocery sector.
Amazon Fresh orders over £40 will now be delivered for free to UK Prime subscribers and its service will be expanded to around 15 million more members.
This means that Prime customers will no longer have to pay a monthly £3.99 add-on fee or £2.99 single delivery fee for Fresh orders.
Customers can choose to receive these free deliveries within two hours, or pay an extra £3.99 to have them delivered within an hour.
Amazon is also allowing for smaller orders, significantly reducing its minimum order value from £40 to £15. Any orders under £40 will still cost £3.99 for two-hour delivery or £6.99 for one-hour delivery.
Until now Amazon Fresh has only been available for customers centred in and around London, but now Amazon is planning a dramatic expansion of the service.
An estimated 15 million Prime subscribers across the UK will soon have access to the service, with Manchester, Birmingham and Edinburgh among the first to see it rolled out.
“Prime members love the convenience of grocery delivery at home, which is why we’ve made Amazon Fresh a free benefit of Prime,” Amazon Fresh UK’s country manager Russell Jones said.
“Grocery delivery is one of the fastest-growing businesses at Amazon … We will keep improving the grocery shopping experience so by the end of the year, millions of Prime members across the UK will have access to fast, free delivery of groceries.”
Influential retail analyst Richard Hyman believes this move will cause “major disruption” in the UK online grocery market, which has undergone rapid and radical change during lockdown.
“Amazon has deep pockets and the massive luxury of not needing to make a profit from food retailing. This is just as well because no one really makes much if any money from online food retailing now.
“A new kid in town with the immediate muscle of the others, and no need to make money, and the best data-driven logistics in retail has been the incumbents’ nightmare for some time, and it’s about to come true.”