Amazon has ignited a fresh supermarket price war by slashing the cost of thousands of grocery items, affecting shoppers who typically buy from Tesco, Asda, Morrisons, and Sainsbury's. The online giant has cut prices on more than 4,300 products — approximately 45% of its Amazon Fresh range — with average discounts of 16%, as it intensifies its assault on Britain's traditional supermarkets.
Price Comparison Data Shows Dramatic Impact
New analysis by The Grocer magazine, using Assosia price data, reveals that Amazon is now as cheap as 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.
Relief for Households Grappling with High Food Bills
For families struggling with stubbornly high food costs, this 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 Intensifies
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, 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 in Grocery
Amazon still holds 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 is now a grocery or household good. 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: Supplier Compliance Concerns
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.
