I bought Woolworths shares last year at $29.50. The latest move where Amazon is partnering up with Harris Farm Markets to deliver fresh food has me worried. I’m an Amazon Prime member and we use it a lot more than I feel comfortable with (I don’t like seeing Aussie money flowing into US profits, especially when some companies do their utmost to avoid paying taxes here in Australia).
What makes Amazon so successful is their incredible logistics capability. As Prime members we can order products and have them delivered to our door (in Toowoomba) the following day with no delivery fees. In Seattle, my son has free same day deliveries as a Prime member. It is just so damn convenient and reliable! No jumping in the car, driving to the shopping centre, finding a park, heading to the shop, finding the items (if they have them) and heading back home.
With many people already using Amazon Prime, adding food to the delivery service will make their delivery logistics even faster, more efficient and more cost effective. I see this as a threat to many bricks and mortar retail businesses, not just the grocery retailers. It might be time to sell Woolworths?
Here’s an extract from the AFR Article:
https://www.afr.com/companies/retail/amazon-to-challenge-woolworths-coles-with-harris-farm-fresh-food-deal-20260126-p5nwyd
Amazon will deliver fresh food to homes in Australia for the first time after striking an agreement with Harris Farm Markets in a move that will intensify competition between the American online retailing giant and the country’s two largest supermarkets, Woolworths and Coles.
The deliveries will initially be rolled out in inner Sydney, with free delivery for purchases of over $100 for Amazon Prime subscribers. Both major supermarkets, which have pointed to the online giant as proof that there is significant competition in the industry, have invested heavily in their home delivery, which represents a quickly growing share of revenues.
The agreement will allow Harris Farm, which markets itself as a premium supermarket and now has 33 stores around the country, to compete with Woolworths, Coles and Aldi, the discount retailer which last year partnered with DoorDash to offer home delivery of more than 1800 products.
Arno Lenior, who runs Amazon Prime in Australia, said everyday items – from toilet paper to nappies and biscuits – had been the company’s fastest growing categories, with sales up 30 per cent year-on-year.
“Our customers are already buying pantry staples, household items, personal care items, from us, but fresh food was really that missing piece and we’re so excited that now our customers can do that complete grocery shop,” he said, adding that the deal with Harris Farm would add thousands of items to its same-day and next-day delivery service in Sydney.
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