12 | The Grocer | 13 January 2018 Get the full story at thegrocer.co.uk
analysis amazon
A new study shows Amazon undercutting mults’ prices by
12.5% on average. But will it remain too small a player to matter?
J
e Bezos is famous for
his maniacal laugh –
and no wonder. Not
only is he now the world’s rich-
est man (ever); new research
from global management con-
sultants Oliver Wyman show
its edgling AmazonFresh con-
tinuing to take a menacing price
position against its rivals.
Based on a sample of 50
products, including fresh,
ambient and household,
Amazon is undercutting Tesco,
Sainsbury’s, Morrisons and
Ocado by 12.5% on average,
even o ering Morrisons own
label at up to 17% less than
Morrisons itself.
Standout examples include
savings of up to 43% on basics
like cheese, crisps, chocolate,
chicken and Coke (see box). On
average, Amazon was equally
priced or cheaper on at least
When will
Amazon
have the
last laugh?
70% of the basket. “We were
quite surprised,” says Nick
Harrison, global co-leader for
retail at Oliver Wyman.
“It’s just one quick check, and
Amazon change prices quickly,
in fact some have changed since
prices were checked on 3 and 4
January. So it’s not particularly
scienti c, but it’s an interesting
challenge for the multiples.”
Amazon may be deploying
“keen pricing while they build
penetration, so I wouldn’t say
for sure this is how they are
going to end up. But it’s an inter-
esting indication of how exi-
ble Amazon is if they are testing
prices far below the standard
price at the supermarkets, even
if they don’t end up settling
t here.”
It’s not that much of a sur-
prise to see Amazon coming in
cheaper, says retail analyst Nick
Bubb. “On this basis Amazon
will clearly be losing a lot ofJames Halliwell
Amazon vs supermarket prices
● Milk (4 pints)
10% cheaper (£1 vs
average £1.10)
● Free-range eggs
(six)
17% cheaper (£1 vs
average £1.20)
● Lurpak butter
(500g)
16% cheaper (£3 vs
average £3.56)
● Cathedral City
cheese (350g)
36% cheaper (£2 vs
average £3.13)
● Fillet steak
16% cheaper(£5.40 vs average
£6.43)
● Chicken breast
15% cheaper (£1.
vs average £2.34)
● Tyrrells salt &
vinegar crisps
(150g)
43% cheaper
(£0.99 vs average
£1.72)
● Cadbury Dairy
Milk (200g)
20% cheaper (£1.
vs average £2.00)
● Napolina extra
virgin olive oil(500g)
29% cheaper (£2.
vs average £3.54)
● Napolina
Spaghetti (500g)
27% cheaper
(£0.80 vs average
£1.10)
● Coke Zero (8 x
330ml)
12% cheaper (£3 vs
average £3.39)
● Pantene Classic
Care Shampoo
(400ml)
32% cheaper (£2 vs
average £2.93)Methodology: Prices were collected on 3-4 January for 50 SKUs,
comprising own-label and brands, across fresh (21 ) ambient
(23 ) and household (6 ). Supermarket prices included all promos.
Where a product wasn’t available , the nearest equivalent was
selected (only the case for two SKUs in two supermarkets).