This week Down Under

Amazon Fresh confirmed: Online grocer to open in Australia in 2018

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Supermarket

Amazon’s launch in Australia will include an online grocery delivery service, Amazon Fresh, though the global retailer is still yet to announce plans for bricks-and-mortar Amazon Go shops in the country.

Amazon’s launch in Australia will include an online grocery delivery service, Amazon Fresh, though the global retailer is still yet to announce plans for bricks-and-mortar Amazon Go shops in the country.

Brittain Ladd, who is in charge of Amazon’s global grocery roll-out, said Australia was an “attractive​” market where the retailer would “launch as many services and products as possible​”.

Ladd said the country would have to wait, though, for its Amazon Go checkout-free physical stores, which the company has been rolling out in America.

[We will] build physical grocery stores and launch Amazon Go only after Amazon has become more established in the country and analysis determines the market will support physical stores​,” he told Fairfax Media.

Amazon Go is potentially the next big disruption to food retail, after budget chains Aldi and Lidl shook up the traditional hegemony of Woolworths and Coles supermarkets with their arrival in Australia by attracting substantial market share.

The new physical Amazon chain automatically bills shoppers’ smartphones via electronically tagged products when they exit the store.

Ladd said Amazon plans to have its Australian channels operational by the end of 2018. Though it has been widely reported that this will happen, the Amazon executive’s comments are the first official confirmation.

Amazon Fresh, the site’s grocery platform which first opened in Seattle in 2007, will go up against existing Australian delivery services and is expected to shake up the market.

Traditional retailers appear to be sanguine about the prospect of Amazon’s arrival in their market, though, even though a new report by Commonwealth Bank shows that just 14% of Australian retailers have a plan to compete with Amazon. Moreover, only 11% of retailers see the American e-retailer as a significant threat

Richard Goyder, chief executive Wesfarmers, which owns Coles, said earlier this year that the company was “not worried about Amazon or anyone else​”.

This stance was reinforced this week when the chief executive of Coles’ arch-rival Woolworths pointed out that Amazon had been used by Australians for over a decade, and was “not a new competitor​”.

At an industry forum in Melbourne, Brad Banducci said: “It has been a robust competitor, [but its arrival] does focus the mind wonderfully on another megatrend: extreme convenience​.”

Yet the Commonwealth Bank report warned against complacency. Referring to Amazon’s full offering, CBA’s Jerry Macey said: “The reality is most retailers can’t effectively compete with Amazon on factors like delivery times and pricing, particularly when Amazon can sustain losses in the short term​.

Many Australian retailers remain unprepared for Amazon’s arrival, or may be understating the potential impact that Amazon’s presence will have​.”

Analysts expect that Amazon’s prices will be around 30% lower than those currently offered by supermarkets when the services enters Australia’s A$90bn (US$69bn) grocery market.

The man working on Amazon’s grocery launch, meanwhile, appears to be looking forward to the first orders being taken.

Australian consumers will embrace online grocery ordering and delivery from Amazon​,” Ladd told Fairfax, adding that he believed his retail store formats could also trade successfully in Southeast Asia.

More stories from Down Under…

New Harvey Beef line will come from WA's most pampered cattle

Western Australian meat major Harvey Beef has placed its emphasis on animal welfare for the launch of its new Rangelands brand.

Harvey-Beef-Rangelands-brand

The state’s biggest beef processor entered a partnership with the Kimberley and Pilbara Cattlemen’s Association (KPCA) for the line, which uses hormone- and antibiotic-free meat from grass-fed, free-range cattle. 

The beef will be sourced from cattle grown in the vast, open ranges of the Kimberley and Pilbara, where cattle roam as nature intended and feast on the abundance of natural grasses​,” Harvey Beef head of livestock Kim McDougall told a press gathering in Perth. 

The KPCA has developed a specific set of animal-welfare criteria which are to be observed by cattle farmers hand-picked to produce beef for the range. Suppliers must also be open to their practices being audited.

John Hartman, head of investment at Minderoo, Harvey Beef’s parent, said the range would tap into growing consumer demand for natural foods.

We know that customers are concerned about where their food comes from and through our partnership with KPCA we can offer a range which guarantees an exceptional standard of animal welfare,​” he said.

Beef farms in the remote Kimberley and Pilbara regions of Western Australia are some of the biggest in the country. 

Rangelands supports their hard work and dedication and allows us to build mutually beneficial partnerships​,” said KCPA’s chief executive, Catherine Marriot.

Our dedication to higher animal welfare standards matches Harvey Beef’s passion for the best quality beef and together we can continue to ensure Western Australia is able to consume ethically produced beef​.”

The beef will be processed on site a plant Harvey, about 140km south of Perth, which employs more than 400 people staff.

State agriculture minister Alannah MacTiernan, a strong supporter of WA’s beef industry, applauded the partnership.

We can do better than being a cattle yard for other countries​,” she said. “There is great potential for the development of WA’s chilled and frozen beef market locally and overseas​.

The work Harvey Beef and others are doing in developing this market is critical and as the minister responsible for agriculture I will be wholeheartedly supporting those efforts​.”

Related topics: Business, Oceania, Supply chain

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