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Customers in certain London postcodes can order meals from restaurants using an Amazon app. Amazon promised free delivery within an hour on orders of £15 or more and no mark-ups on restaurants’ standard prices.
The Amazon Restaurants service is only available to customers of Amazon’s Prime service, which costs £7.99 a month or £79 a year, and offers unlimited one-day delivery, free music streaming and other services.
Amazon listed more than 100 restaurants including large operators such as Strada, specialist chains like the Middle Eastern-themed Comptoir Libanais and the Michelin-starred Indian restaurant Benares, based in Mayfair.
Amazon’s move pits the US online retailer’s financial power against established operators in the market for delivering restaurant food to time-strapped Londoners with cash to spend.
Deliveroo launched in 2013 and has about 3,000 riders delivering for restaurants in London. Its riders went on strike last month over changes to their pay that they said would make them worse off.
Other competitors in the market include Just Eat, which operates nationally and puts diners in touch with about 30,000 UK restaurants, and UberEats, owned by Uber, the taxi-hailing app.
Neil Campling, an analyst at Northern Trust Capital Markets, said Amazon’s move would shake up the market because it has the money and technology to grab business in a growing market. It could put pressure on Just Eat, which has been increasing the charges it makes to restaurants for its service, he said.
Campling said: “The bullish thesis on Just Eat is a perception that Amazon will have little impact on Just Eat as their focus is on the restaurant delivery market in London rather than, say, delivering a kebab in Barnsley on a Tuesday night. Time will tell but Amazon doesn’t do small scale over time and nor does Uber.”
Even as real incomes have been squeezed after the financial crisis, business has boomed for restaurant deliveries as time-constrained consumers, particularly in London, have ordered in food. Britain is predicted to spend almost £8bn a year on pizzas, curries and other takeaway meals by the end of this decade.
Amazon’s service will at first deliver to busy London locations such as the City and West End, Whitechapel, Islington, Kensington and Chelsea and Southwark but it said there are plans to expand coverage.
Al Wilkinson, head of Amazon Restaurants UK, said: “Based on our own research into what is important to consumers in food delivery, our team have hand-picked a selection of the best quality local restaurants in London. We’re excited to be helping many of these small businesses start offering home delivery for the very first time.”