Online Giant Amazon Launches Fresh Food Offer

Amazon has launched fresh food deliveries in the UK in the latest threat to Britain's embattled major supermarket chains.

The long-anticipated move will see AmazonFresh products made available in parts of London to members of the online retailer's Prime subscription service - for additional charges.

It (Other OTC: ITGL - news) sees the US giant take on a crowded grocery sector where major players Tesco (Xetra: 852647 - news) , Sainsbury (Amsterdam: SJ6.AS - news) 's, Asda and Morrisons are already engaged in a fierce price war as they try to face down the threat from discounters Aldi and Lidl.

Specialist delivery firm Ocado is also part of the battle.

They are competing over a market that is expected to nearly double in size to £17bn by 2020.

Amazon's offer includes fresh and frozen products from Morrisons, after it struck a wholesale deal with the supermarket earlier this year, as well as products from major brands such as Coca-Cola, Kellogg (Hamburg: 944624.HM - news) 's, Danone (LSE: 0KFX.L - news) , Warburtons and Walkers.

Ajay Kavan, vice president of AmazonFresh, said: "We are launching with a comprehensive offer in a limited area and will take our time to hone and improve our service."

The launch comes a day after Sainsbury's reported falling sales in its latest financial quarter, although it said online sales were up 8% as it introduced a new app.

Sainsbury's has already moved to square up to Amazon in the wider retail space as it looks to complete a £1.4bn takeover of Argos owner Home Retail Group.

Amazon launched a fresh food offering in the US in 2007 and has offered some food and drink items to British customers since 2010.

Members of Amazon Prime in the UK pay an annual subscription of £79.

They can sign up for a 30-day trial of AmazonFresh and will then pay £6.99 per month for the service, with unlimited deliveries for orders of above £40.