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Amazon takes on food retail giants with grocery launch

Internet retailer Amazon is taking on the giants of food retail after launching its own grocery service this morning.

The retailer is selling more than 22,000 grocery lines from major names in FMCG such as Kraft, Nestlé, PepsiCo and Procter & Gamble in a move that will pitch it in direct competition with the likes of Tesco, Sainsbury’s, Asda and Ocado.

Retail research institute the IGD has predicted that the online grocery market will double over the next five years from £3.7bn now to £7.2bn in 2014.

Amazon launched a similar grocery service, Amazon Fresh, in the US in 2007, and its launch in the UK comes as Ocado prepares for a stock market offering.

Amazon.co.uk director of grocery James Leeson said that the launch would help Amazon in its quest to be "the place where customers can find and discover any product they want to buy online".

"We will work tirelessly to increase the selection of grocery items available to be delivered directly to customers’ doors," he added.

Customers who pay a £49 annual charge will benefit from free next-day delivery, while Amazon also offers shopping via smartphones.