Amazon Fresh has cut prices on more than 4,300 grocery items
Shoppers who normally buy their goods at supermarkets such as Tesco, Asda and Morrisons have been given an alert by Amazon.
It ignited a fresh supermarket price war by slashing the cost of thousands of grocery items. The online giant has cut prices on more than 4,300 products – around 45% of its Amazon Fresh range – with average discounts of 16% as it steps up its assault on Britain’s traditional supermarkets.
New analysis by The Grocer magazine using Assosia price data shows the move is already having a dramatic impact. It found that Amazon is now as cheap – or cheaper – than Tesco, Asda, Morrisons and Sainsbury’s on nearly two-thirds of comparable grocery items. Just two months ago, Amazon Fresh was the cheapest option for 35.9% of products tracked across categories including baby goods, bakery, drinks, fresh and frozen food.
Now, it undercuts rivals on 64.9% of items with more than one in five products exclusively the cheapest. The aggressive price-cutting marks a major escalation in the battle for Britain’s grocery spending and could force the big four supermarkets to respond with further discounts of their own.
Relief for households
For families grappling with stubbornly high food bills, the move offers the prospect of meaningful savings. By targeting everyday essentials and household staples, Amazon is positioning itself not just as a convenience option but as a serious contender on price.
Some shoppers are already expected to shift part of their weekly shop online, particularly for packaged goods and bulk buys, while continuing to rely on physical supermarkets for fresh items.
Pressure on supermarkets
But the price blitz piles fresh pressure on an already squeezed sector. Supermarkets are battling rising wage costs, supply chain pressures and tight margins.
Analysts warn that sustained discounting by Amazon could trigger a prolonged price war so forcing rivals into further cuts that eat into profits.
While shoppers stand to benefit in the short term, the longer-term impact could reshape the UK grocery landscape.
Amazon’s growing ambitions
Amazon still has just a 1.9% share of the UK grocery market, but its ambitions are clear. Its grocery business is growing rapidly, with sales rising twice as fast as the rest of the company last year. Nearly one in three items bought on its UK site are now grocery or household goods.
The firm is also expanding rapid delivery through its “Amazon Now” service, promising groceries in under 30 minutes, with plans to extend beyond parts of London.
Despite closing 19 Amazon Fresh stores last year – with some reopening as Whole Foods Market outlets – it continues to expand through online delivery and partnerships with chains including Morrisons, Co-op and Iceland.
Cloud on the horizon
The push comes as Amazon faces scrutiny from the Groceries Code Adjudicator over whether it has delayed payments to suppliers.
In the latest compliance rankings, it remained bottom of the table although its score improved, with 69% of suppliers saying it mostly follows the rules.
