Amazon booze boom is a headache for grocers
AMAZoN booze sales are booming as it undercuts supermarkets to grab market share.
The online giant is making a fresh assault on Britain’s grocers, by offering prices on drinks that are more than a tenth lower than at a supermarket. The aggressive strategy has infuriated supermarket bosses who have just repaid close to £2bn in business rates relief.
Analysts have said part of the reason Amazon is able to beat them for price is because they pay less rent, rates and corporation tax.
Data from researchers Kantar, provided exclusively to the Mail, shows Amazon booze sales soared 663pc in the last four years, outperforming the market, which rose 38pc.
Total sales have risen from £5.2m in 2016 to £39.9m in the 12 months to November 29. Before Christmas, Amazon was offering Aberlour whisky for £28, £7 less than at Sainsbury’s, and opihr gin for £18, £1 less than Sainsbury’s and £4 less than Tesco. Retail analyst Richard Hyman said: ‘The margins on alcoholic drinks are wafer thin. The fact it pays very little tax and doesn’t have loads of stores, with rates on, has got to be a contributing factor, but it’s just one factor.’
Richard lee, head of alcohol at Kantar, said: ‘ Supermarkets absolutely see this as a threat. Amazon has seen really strong growth.’
This month supermarkets and shops urged the Government to reform business rates as they paid back more than £2bn of relief.
The Government is carrying out a ‘fundamental review’ of the tax.
Amazon said pricing and business rates are not linked. It said: ‘That’s not how we set prices. our customers expect to come to Amazon and find the lowest prices. We do the hard work for them, finding the best prices and matching them for customers.’