Is Amazon really launching an online grocery shop in the UK?

(Tim Goode/PA)

Online shopping giant Amazon is reportedly gearing up to enter the UK grocery market, pitting it against major players such as Tesco and Sainsbury's.

The Seattle-based firm, which employs more than 7,000 staff in the UK, has signed a 10-year lease on a former 300,000-plus sq ft Tesco warehouse in Surrey, according to Retail Week.

This has renewed speculation that the firm, which ranges from selling books to making TV programmes, will launch its Amazon Fresh food operation in the UK.

Amazon Fresh, launched in the US in 2007, would challenge the rest of the UK grocery market which is locked in a fierce war that has seen prices fall by around 1.6% over the last year.

Retail Week reports that Amazon has also secured the rent on two more warehouses in Leicestershire and Staffordshire, which are also suitable to handle fresh food.

It has been reported that Amazon Fresh would target 2% of the UK's £149 billion grocery market, which is three times the market share of the country's biggest online-only grocer, Ocado.

(Joe Nicholson/AP/PA)

Last month Amazon, which is celebrating its 20th anniversary, briefly became the world's biggest retailer by market value by leapfrogging Asda owner Wal-Mart.

Amazon saw its market value jump to $265 billion (£171 billion) after better-than-expected second quarter figures, before retreating over subsequent weeks.

(amish.patel/Flickr)

Amazon said it would not comment on speculation about the UK launch of a fresh food service, but it added its Surrey warehouse would directly employ around 20 people and around 140 drivers, who would work for independent delivery firms.

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