Amazon.com., which has been seeking to push further into shoppers’ everyday lives, was the least expensive grocery-delivery option in New York City, beating the closest competitor by $20 on a 30-item order, a study found.
The report, from analysts at Nomura Securities International, shows how supermarkets could be the next target of the Seattle-based web retailer, through the combination of convenient delivery at low prices that it has used to snag business from book stores and big-box chains.
In the pricing study, Nomura ordered 30 grocery items - including green seedless grapes, Eggo whole-wheat waffles and a two-litre bottle of Coca-Cola - from competing New York delivery services Amazon Fresh, Instacart, Peapod. and Fresh Direct Holdings.
The order cost $122.03 from Amazon Fresh, which included a $5 tip. Instacart, with the order placed through partnering grocer Fairway, came in $20 higher at $142.86. Fresh Direct was the most expensive, at $158.74.
“We believe that price, convenience, selection, and service will dictate who wins, but believe Amazon is currently very well positioned,” Robert Drbul, an analyst at Nomura, wrote in the report.
Amazon has been investing billions in new warehouses and fulfilment services as it seeks to persuade shoppers to use its website to order household items instead of making trips to the supermarket. Last month, the company unveiled the Amazon Dash Button, which lets customers order products like laundry detergent and baby food by pushing a button that can be mounted to a washing machine or kitchen cupboard. The device uses home wifi networks to alert Amazon to deliver the item.
Online groceries are a $10.9 billion industry in the US, and the market is expected to grow 9.6 per cent annually through 2019, according to a December report by IbisWorld.
News by Bloomberg, edited by ESM
