Amazon goes into the groceries business

By Steve Malone

Posted on 16 Jun 2006 at 11:24

Online retailer Amazon, which has already cornered the market in online books and a wide range of other goods ranging from consumer electronics to kitchen appliances and garden furniture, is going into the dried goods business in the US.

The company has started to offer a range of 10,000 non-perishable groceries such as pasta, tinned food, breakfast food and sauces. It is also stocking a range of bathroom goods such as razor blades, shampoos and over the counter medicines.

Although it seems odd that Amazon should go into the grocery business, the online store has been selling 'Gourmet' delicatessen food in the US for three years now, among other ranges including jewellery and car accessories.

The company will be offering 'free shipping' and 'great prices' although whether Amazon can translate its business model to such low margin goods and still make a profit remains to be seen.

In the UK, the big supermarkets like Tesco and Waitrose have already developed thriving businesses in online grocery ordering and Amazon may have trouble establishing itself as a supplier over here, especially as the brand is much more narrowly associated with books than it is in the US.