Amazon goes into fresh food delivery in UK

LONDON (REUTERS) - Amazon is setting out to become Britain's bread and butter for online food shopping.

The Internet store has teamed up with Britain's fourth-largest grocery chain, Morrisons, to deliver fresh and frozen goods, in some places as quickly as under one hour.

Mr Justin Urquhart-Stewart of Seven Investment Management says Amazon is entering a market that is already under a lot of pressure. "Amazon can come in and 'what's their primary strength'? The answer is delivery."

But it's up against established online rivals, like Tesco and Ocado, and heavy discounters, Aldi and Lidl.

The deal with Morrisons is Amazon's biggest foray into the food delivery business outside the United States. Analysts say it could target every part of the retail sector, from big weekly shopping trips to buying bread, milk and vegetables.

The UK online grocery market is predicted to double to nearly US$24 billion (S$33.6 billion) in the next five years, according to industry research group IGD.