Amazon looks to UK grocery acquisition

Amazon’s aim to conquer retail’s largest category, grocery, through the acquisition of bricks-and-mortar supermarkets has been further illuminated by its reported attempt to initiate takeover talks with the upmarket chain, Waitrose, in the UK.

A recent report in The Sunday Times has suggested that one of Amazon’s most senior executives in Britain, vice president of special projects Ajay Kavan, had several “enormously informal” conversations with a director of the John Lewis Partnership, Waitrose’s parent company, about a possible deal last November. However, a request for a formal meeting was apparently shut down by the board.

Citing an unnamed source, The Sunday Times reported that Amazon’s interest in the 350-store supermarket chain was known to the partnership’s executive team, including Waitrose’s boss Rob Collins, group finance director Patrick Lewis and head of John Lewis department stores Paula Nickolds, but chairman of the board Sir Charlie Mayfield denied the report.

“These times are ripe for speculation, but there has been no approach to the partnership by Amazon regarding Waitrose, and nor would I expect there to be,” Mayfield told.

Analysts have speculated that Amazon could buy a British grocery chain since it launched its online grocery delivery service, Amazon Fresh, in the market two years ago. Morrisons, Sainsbury’s and Waitrose reportedly were all considered potential targets.

The recent £14 billion merger between Sainsbury’s and Asda has been cast as a move in part to ward off Amazon’s broader move into grocery, which many see as ramping up since the company’s US$13.7 billion acquisition of Whole Foods last summer.

Since taking over Whole Foods’ 470 stores in the US, Canada and UK, Amazon has cut prices on staples and rolled out free two-hour delivery for online grocery orders in several cities across the US.