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Amazon adding groceries in Canada

Online giant will sell thousands of grocery items, but no fresh food yet

AmazonFresh_iStock_000021460691XSmall_WEB

Amazon is getting into the supermarket business in Canada. To no one’s surprise the company this morning said that it will begin to sell groceries in this country as part of a giant category expansion.

In addition to groceries, Amazon.ca is adding auto parts, as well as some 12 other product categories.

Amazon will now sell 15,000 food products in Canada at amazon.ca/grocery, including baby food and formula, snacks, baking goods and coffee and flowers.

READ: Is Amazon a viable threat to the Canadian grocery industry?

While the launch doesn’t include perishables like milk, fruits or vegetables, it’s a strong sign that Amazon wants to make inroads in an area of the food business that hasn’t been tapped by any company in Canada outside of major cities.

Amazon.ca country manager Alexandre Gagnon said the next step is to grow its lineup of products.

“No one customer is the same, so our focus is on providing a broad selection of brands so that customers can easily and instantly find and buy exactly what they are looking for,” he said in an emailed response.

Brands available on the site include Nestle, Campbell’s, Green Mountain and Kellogg’s with special emphasis on the homepage this morning on Nestle brands and categories such as organic, snack food, beverages and pantry staples like baking supplies.

Several categories focused on stock-up shopping. For instance, in coffee, Amazon.ca is selling a 96-pack of Timothy’s Breakfast Blend K-Cup coffee for $65.96 (or 69 cents per pod) with a promise of delivery by Friday Nov 1.

A 400-gram box of Kellogg’s Vector cereal, meanwhile, was selling for $5.39 while a six-pack of Cliff bars was going for $12.52.

Amazon said that most grocery items will be eligible for free shipping or Free Two-Day Shipping with Amazon Prime, which gives customers free shipping in exchange for a flat yearly fee.

On Amazon’s grocery website, there was also a message that offered free shipping on orders over $25.

“Amazon.ca dramatically increase our selection this year and we are pleased to now bring the auto and grocery stores to our customers,” said Gagnon, who works out of Amazon’s Seattle offices but is from Quebec.

“We’re working to deliver unmatched selection of everyday essentials and must-have products.”

In the United States, Amazon delivers fresh food to customers in Seattle and L.A. through its AmazonFresh division.

The company said earlier this year that it intends to expand that service to some 20 cities next year, including some outside the U.S. Toronto has been pegged as a likely target.

READ: Amazon set to expand online grocery service in U.S.

Analysts say that Amazon’s entry into grocery in Canada could cause upheaval within the industry since none of the major grocery chains in this country offer product sales online.

Walmart earlier this month started to sell some dry groceries over the Internet and Loblaw’s is selling Joe Fresh clothing.

READ: Battle of the titans: Walmart and Amazon

The only major online grocers in Canada now are Grocery Gateway, a Longo’s subsidiary that does business in Toronto, and Well.ca, a Guelph, Ont.-based firm that ships dry goods nationally.

Less than one per cent of Canada’s $112 billion grocery business is done over the Internet, according to estimates.

But that figure is expected to rise as companies like Amazon and Walmart develop their offerings.

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