Amazon heats up pantry war with Coles and Woolies

Starting today, Aussie shoppers will be able to buy pantry products like chips, cereal and health foods through Amazon, as the company continues its push into the local market.

The online juggernaut will offer more than 10,000 products from over 400 local and international brands, like Arnott’s, Milo, Masterfoods and Oreo. That brings its catalogue to more than 80 million products.

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“Since the launch of amazon.com.au in December of last year, we have been focused on growing selection and services for Australian customers,” Amazon Australia country manager, Rocco Braeuniger said this morning.

“Today we are delighted to add to the over 80 million products already available on the store with the launch of Pantry Food and Drinks, bringing greater convenience to customers, underscored by everyday brilliant value and fast delivery.”

Pantry Food and Drinks is the 27th category added to Amazon Australia’s catalogue, with the online retailer launching Amazon Pet Supplies, Travel Store, Automotive and jewellery categories last month.

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Amazon’s purchase of US chain, Whole Foods, last year indicated a move into groceries and triggered tremors through international grocery sectors.

Just last month, industry research group IBISWorld predicted a supermarket price war.

Although Amazon Australia is currently hamstrung by challenges associated with fresh food storage and delivery, IBISWOrld senior industry analyst Andrew Ledovskikh said the possibility of Amazon Australia offering fresh food, along with Costco’s expansion will boost competition.

“The entry of [German hypermarket chain] Kaufland and Amazon, as well as the expansion of Costco, will all work to intensify competition in the industry, making a new price war more likely over the next five years. Against this backdrop, suppliers will need more protection than ever,” he said.

Kaufland has said it will compete heavily on price, threatening Coles, Woolworths and Aldi.

“Kaufland’s hypermarkets are expected to offer more than double the product range of the traditional supermarkets, and offer not only groceries, but traditional department store products such as homewares and outdoor equipment,” Ledovskikh said.

To entrepreneur Dick Smith, Kaufland’s entry into the Australian market presents a significant risk to local supermarkets.

“If it’s one cent cheaper, everyone will run to it,” he told SmartCompany.

“They will be incredibly successful and they’ll take millions of dollars overseas.”

Amazon Australia said it plans to capitalise on Australia’s growing health trend, offering health brands like Ovvio tea, Genoa Goods and The Protein Bread Co.

Director of The Protein Bread Co., Luke Hopkins said Amazon Australia will be “pivotal” in building a healthier Australia.

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“Amazon will be a pivotal partner in bringing this dream to life by extending our healthy high protein and low carb baking mixes to a broader, national audience.

“Our goal is to support Aussies with better food choices and working with Amazon will open the door for even more people to try our healthier versions of traditionally high carb foods such as pancakes, pizza and cookies, which will support them in achieving their goals.”