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Sainsbury’s and Tesco ready same-day delivery: has the Amazon fightback begun?


Hot on the heels of announcing plans to double the size of its click-and-collect network, Sainsbury’s is now running trials of same-day grocery delivery.
As in the case of Amazon’s own food service launch, shoppers in London will be among the first to experience the new service, which is available in Streatham and Richmond, as well as in Brookwood, near Woking (Surrey).

The cut off for same day delivery is 12pm, for delivery after 6pm or collection after 4pm.

Sainsbury’s is also opening a dark-store in Bromley-by-Bow, in the London borough of Tower Hamlets, and plans to hire an additional 900 staff.

Tesco is also believed to be trialling a same-day delivery service.

The eDelivery view:

AmazonFresh launched in London in early June. As is always the case, there are flag-wavers and doom-mongers in almost equal number who, like snails after the rain, appear whenever Amazon is involved in any kind of new service announcement. This is the greatest thing in the history of things, we are told. Or, conversely, this sounds the death knell for incumbents.

The first casualty of war might be truth, according to the saying, but the first casualty of Amazon PR seems to be perspective.

It would be wrong to ignore or dismiss Amazon’s forays into new markets and new sectors. After all, this is a company with an impressive track record of disrupting the status quo and benefitting from it. But the UK grocery sector is not some sleepy economic backwater; it is one of the most evolved and competitive you’ll find anywhere, and with huge growth potential in the online grocery market, Amazon’s appearance on the stage doesn’t automatically mean the final curtain call is coming for any of the incumbents.

The big UK supermarkets have had it tough for at least the last five or six years – a period where post-recession Britain started to fall in love with Aldi, Lidl and other discount operators, and when shopping habits spun on their axis: goodbye big weekly shop, hello convenience-driven grazing.

Tesco has been limbering up for a fight after being caught on the ropes thanks to accounting troubles and an expansion into areas that detracted from its focus. Asda similarly has been reapplying its focus. While Sainsbury’s, as we all know, has bought Argos; same-day delivery of food and non-food, an enviable delivery network – all now a given.

It’s only a matter of time before Ocado joins the same-day fight. Many analysts and observers have considered Ocado to be the single biggest casualty of AmazonFresh, but it would be foolhardy to jump to such conclusions; sometimes share price fluctuations tell you far more about investors than the companies they invest in, as was seen with the rise and fall of Nintendo’s share price, when markets incorrectly assumed the success of PokemonGo was going to deliver a healthy revenue stream, and then backed away once their ignorance had dissipated.

Grocery delivery has been in a league of its own for a long time. Where else are guaranteed, selectable one-hour slots part of the fabric of the transaction? The move to same-day is going to see the grocery continue to lead the way. But the combination of food and non-food same-day delivery – of mass-market items from a single point of ordering – is going to have a profound effect on customer expectations.

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