Profitero analysis: how does Amazon Pantry’s product assortment and pricing compare with UK supermarkets?

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Ryan JepsonRyan Jepson, strategy & insight analyst, Profitero, assesses the impact of Amazon Pantry on online grocers in the UK 

Last month, Amazon’s Pantry service arrived in the UK, “designed to take the heavy lifting out of replenishing the often bulky basics and store cupboard essentials that people need every day,” according to an Amazon Pantry spokesperson.

The nationwide service, exclusive to Amazon Prime members, enables shoppers to fill a Pantry box with up to 20kg of everyday essentials from a list of 4,000 grocery items, including food and drink, household supplies, pet care, and health and beauty products.

Prime members can buy as much or as little as they want for a delivery fee of £2.99 for their first Amazon Pantry box and 99p for each additional box in the same order.

A similar service called Prime Pantry has been available in the US since 2014.

The launch comes hot on the heels of Amazon’s trial to deliver chilled and frozen products via its Prime Now service, as the e-tailer ramps up its expansion of grocery delivery and an expected launch of AmazonFresh in the UK early next year.

The impact of Pantry on full-basket online grocers in the UK will need to be watched closely. To assess Amazon Pantry’s assortment and pricing compared with other retailers, we analysed just under 3,000 products that were available on Amazon Pantry on 7 December 2015 and benchmarked these products against the six UK supermarkets who sell online: Asda, Ocado, Tesco, Waitrose, Morrisons, and Sainsbury’s.

We found that:

  • No UK online supermarket carries more than 79% of Amazon Pantry’s assortment
  • A handful of beauty, pet, and food brands  – L’Oreal, Purina, and Heinz, in particular – top Pantry’s assortment
  • Amazon Pantry is the clear price winner, overall and for top categories such as food
  • Other retailers, however, are more developed in ratings and reviews for these products

1. Ocado has the highest product assortment overlap with Amazon Pantry

In our analysis, we found that Ocado had the highest product assortment overlap with Amazon Pantry at 79%. Ocado was followed closely by Tesco, Asda, and Sainsbury’s, which sold 75%, 74%, and 73% of Amazon Pantry’s products, respectively. By contrast, Waitrose currently sells just 55% of products available on Amazon Pantry.

Figure 1: Product range overlap with Amazon Pantry

Amazon Pantry Selection 1-5

2. L’Oreal, Purina and Heinz have the highest number of products sold on Amazon Pantry

If we take a look at the number of products available on Amazon Pantry by brand, L’Oreal leads the way with 101 products, followed by pet care brand Purina with 86 products and Heinz with 65 products.

Figure 2: FMCG brands with the most products sold on Pantry

Amazon Pantry Brands 2-5

 

3. Amazon Pantry is the clear price leader

As with our previous analysis of Amazon’s chilled grocery launch in the UK, Amazon is shown to be the clear price leader.

All six supermarkets in our analysis were notably more expensive than Amazon Pantry on the exact same products, with Waitrose being the most expensive supermarket compared to Amazon (+29%) and Asda the least expensive (+16%).

Figure 3: Amazon Pantry pricing vs UK supermarkets

Amazon Pantry Pricing 3-5

When we conducted our analysis across a range of categories available on Pantry, Amazon was found to be the most price competitive on bath and body products (Amazon Pantry was 15% less expensive than the average across supermarkets) as well as several food categories, including biscuits, snacks and crisps (Pantry 14% less expensive than the average) and cereals and muesli (Pantry 13% less expensive than the average).

However, in higher value categories such as beer, wine & spirits, Amazon Pantry was priced closer to competitive supermarkets at just 6% less expensive than the average.

Figure 4: Amazon Pantry category pricing analysis

Amazon Pantry Categories 4-5

4. UK supermarkets beat Amazon Pantry on number of product reviews

While Amazon Pantry is clearly competitively priced, the one key area it needs to improve is the number of product reviews, which are incredibly important to a product’s success, particularly in those ‘essential’ categories that Pantry is competing on, such as baby and health and beauty.

Our analysis shows that relatively few Amazon Pantry products currently have reviews (just 28%). For these same products, Ocado, Waitrose, Sainsbury’s and Asda each boast a higher proportion of reviews – with Ocado leading the way. The online-only supermarket benefits from having customer reviews on 78% of those products that are also sold on Pantry, and is a clear point of differentiation when it comes to maintaining customer trust and loyalty.

Asda wins on sheer number of reviews per reviewed product, 82, compared to 50 for products on Amazon Pantry.

Figure 5: Amazon Pantry number of reviews vs UK supermarkets

Amazon Pantry Reviews 5-5

Amazon Pantry – expect rapid change and development

Already 16% of the products we originally spotted on Amazon Pantry in November are no longer available on the service. Expect continued rapid turnover in assortment—and changes in pricing—as Amazon experiments and optimises with Amazon Pantry.

Our monthly FastMovers reports, which monitor Amazon best sellers daily in key categories, will start tracking the number of best sellers that are sold on Amazon Pantry in each relevant UK category. Click here to download your complimentary FastMovers report.

(A Retail Times’ sponsored article)