Tesco, Britain's biggest retailer, is extending its same day online grocery delivery service across the whole of the country, ratcheting up competition in the cut-throat supermarket sector. Ciara Lee reports.
It's a cut-throat market and Tesco is trying to stay at the front of the queue. Britain's biggest retailer is extending its same day online food delivery service across the whole of the country. For a fee, Tesco customers can order by 1pm and have their shopping delivered from 7pm onwards. Online shopping is one of the better-performing parts of Britain's retail sector - making it a key battleground for supermarkets. They're grappling with the growth of German discounters Aldi and Lidl. And then there's the encroachment into all areas by U.S. giant Amazon. Last year, Amazon launched a British version of its U.S. AmazonFresh food delivery service. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "Competition has been quite fierce for some time and the introduction of Amazon into this is only going to increase that. Amazon with the technology side of things, it's puts its self in a significant advantage to others in that aspect. But then Tesco has been around for a very long time. It's been the number one player for a very long time and if it can deliver on this then it puts itself in strong competition with Amazon." Last month Amazon agreed a $13.7 billion takeover of Whole Foods - revealing its food retail ambitions. Britain's No. 2 grocer Sainsbury's has also been getting in on the action and offers same day delivery from 30 stores. And there's a lot at stake. Britain's online food market is expected to grow by 54 percent to 16 billion pounds in the next five years.