Report: Amazon to bring 'ultrafast' grocery delivery to the UK

Dive Brief:

Amazon is reportedly planning to introduce an ultrafast grocery service in the U.K., according to Reuters. The new service, called Ultra Fast Fresh, could be available to nearly 40% of U.K. households by year’s end, sources said.
To prepare for the launch of the service, Amazon is retrofitting nine depots in the U.K. so they can handle fresh produce and fulfill orders within hours.
Sources also noted that Amazon could make AmazonFresh a free service for Prime members in the U.K. as part of the launch. Currently, AmazonFresh is only available in the U.K. with a monthly add-on fee or per-order charge.

Dive Insight:

In the U.S., ultrafast grocery delivery is currently available for free for Prime customers. The service, which falls under AmazonFresh, promises shoppers will get their orders within one to two hours. Amazon waived the $14.99 monthly fee for AmazonFresh, including the ultrafast option, in October.

While AmazonFresh is available in more than 2,000 U.S. cities, ultrafast delivery is available by invitation only in select metros. The company has said it will continue expanding the program.

One key issue with fast delivery in the U.S. is the sprawling footprint of cities and towns and their distance from fulfillment centers. The U.K. is much smaller geographically with denser metro areas, and may be better set up for speedy delivery once existing warehouses are properly outfitted.

Demand for fast and free delivery is on the rise and may become even more important in a post-COVID world where more shoppers choose to buy groceries online. In a 2019 survey from Capgemini Research, 55% of shoppers said two-hour grocery deliveries would increase their brand loyalty.

Amazon said it has increased its grocery capacity by 60% amid the pandemic, but the company has still had its share of struggles in the U.S. Last week, Amazon stopped accepting new grocery customers, and in March it had to halt orders for Prime Pantry.

In the U.K., issues with Amazon grocery delivery haven’t been reported, though Ocado has reportedly been overwhelmed with demand.