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In focus: Amazon Prime Pantry

Leading e-tailer Amazon has this week launched Prime Pantry, a new shopping experience on Amazon.com that gives its Prime members the chance to shop and receive deliveries for household essentials.

As customers use the service, each Pantry item informs them what percentage of a Pantry box it fills based on its size and weight. The Amazon Prime Pantry boxes can hold a weight of up to 45 pounds or four cubic feet of household products.

Customers have a range of products to choose from, including fast moving consumer goods like toilet rolls and nappies, and there is a flat $5.99 delivery fee per Prime Pantry box. Delivery is guaranteed within four days.

The move represents the next stage of Amazon's move into grocery retailing, following the recent launch of AmazonFresh in a select few cities in the US, which provides same-day delivery on a range of food and perishable goods.

Natalie Berg, global research director at industry intelligence group Planet Retail, said that the wider industry should not take the launch of Amazon Prime Pantry lightly, although she argued that it is "a long way from becoming the first port of call for online grocery shoppers".

She added: "The biggest barriers, in our view, are the weight limitations and slow delivery. Forty-five pounds adds up very quickly: a Coke fridge pack, a bag of pet food and some laundry detergent would fill an entire box.

"And let’s not forget that it’s often those bulkier items that shoppers look to buy online in order to avoid the heavy lifting. Meanwhile, Prime members are unlikely to accept four-day lead times, particularly when it comes to household essentials."

Planet Retail expects Amazon to launch a high-margin, quality-driven private label line to help support the new venture, and Berg said she is confident in the e-tailer's ability to become a "credible grocery retailer" in time.

"The continued roll-out of AmazonFresh combined with new technologies that make routine purchases easier – such as Dash and Flow – will ultimately drive loyalty, further embedding the Amazon brand into shoppers' everyday lives," she explained.

Amazon reported its first quarter results yesterday, with net sales up 23% year on year to $19.74 billion and profit rising to $108 million.

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