FMCG UK Price Comparison (January 2020): AmazonFresh undercuts leading rivals by at least 6.9%

FMCG UK Price Comparison (January 2020): AmazonFresh undercuts leading rivals by at least 6.9%

Edge by Ascential’s price comparison analysis matches a minimum of 3,587 branded products from AmazonFresh against those from Asda, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.

The price comparison encompasses the following categories:

• Baby
• Beer, Wines & Spirits
• Grocery (Ambient, Fresh and Frozen Foods and Drinks)
• Health & Beauty
• Home Care (Household Cleaning, Laundry and Pet Care)

The analysis only includes products where there is an exact match and does not include Own Label SKUs. This is a shelf price comparison and therefore does not include multi-buy promotions.

Morrisons overtakes Asda to be the closest rival to AmazonFresh

On January 1, AmazonFresh was at least 6.9% cheaper than its leading rivals. Morrisons was its closest rival with an average price difference of 6.9%, down from 9.4% on November 1. Asda slipped to second with its price difference rising by 1.1% to 7.2%. This is the first time it has not been the closest rival to Amazon in more than a year.

Sainsbury’s saw the greatest change from November 1. Its average price difference moved from 7.5% to 11.9%, falling behind Morrisons and Tesco. There was little change overall for Tesco and Ocado.

Sainsbury’s overall price difference change was because the percentage of products where AmazonFresh was cheaper rose from 42.4% in November to 48.6% in January. Most of these were products that were price matched in November.

Morrisons got more competitive because the percentage of products that were cheaper on AmazonFresh fell from 42.8% to 40.2%. Half of these products were then price matched to AmazonFresh and half were cheaper on Morrisons.

Sainsbury’s price gap rose across all categories except Baby, but it was Grocery and Health & Beauty that made the most difference. The price gap in Health & Beauty rose from 12.9% to 20.6%. Grocery only rose by 3.3% to 9% but it had a similarly large effect due to the category being much larger.

These categories were also the most influential in Morrisons price gap reduction. In Health & Beauty it fell 6.1% to 13.1% and in Grocery it fell just 1.1% to 5.2%. There was not a huge change in Grocery particularly for Asda, Ocado and Tesco.

Analysts at Edge by Ascential looked at the 1,715 products available across the seven retailers on November 1 to understand which one offered the most competitive prices. 

Over half (58%) of all products could be purchased at their lowest price on AmazonFresh. AmazonFresh, however, seemed to favour a price matching strategy on these key lines as many of the products could be purchased for the same lowest price from at least one of the other six retailers. Sainsbury’s and Asda, on the other hand, offered the unique lowest price on 11% and 10% of the 1,715 products respectively, against 6% of AmazonFresh, and only 1% of Tesco.

On January 3, Asda made over 1,700 price reductions which would change the complexion of this analysis. A rerun of the analysis of January 9, showed that Asda overtook Morrisons to become the closest rival to AmazonFresh with an average price gap of 5.8%.

Looking at the price cuts on January 3, more than 75% of the cuts were in the Grocery category, particularly focused around the Ambient Foods sub-category. Overall the average price reduction was 26.4%, the Grocery category had the same overall average price reduction with a similar reduction across its sub-categories. Branded items made up 82.5% of all price cuts and 77.9% in the Grocery category.

On the same day, Asda increased the price of more products than it reduced. This was largely because Asda ended many of its Christmas/New Year promotions on Beers, Wines & Spirits. In the Grocery category, there were 27.5% more price reductions than increases.