Iceland Foods is set for a major expansion of its grocery partnership with Amazon, and plans to roll the service out across its store estate by the end of the year.
The grocer first began listing its groceries on Amazon in September 2023. Deliveries were initially limited to select parts of Greater Manchester and London, with plans to roll out further.
However, the expansion has been delayed due to difficulties integrating the service alongside Iceland’s own delivery slots. The Grocer understands store managers found the traditional grocery model – where orders are placed via the Amazon website and collected by Amazon couriers – difficult to ensure they adhered to cold chain rules.
To mitigate the problem Iceland began trialling a new “world first” merchant-fulfilled model in Newcastle last year, whereby orders are placed via the Amazon website, but are picked and delivered by Iceland through its own delivery infrastructure.
It’s currently live in two stores, with plans to roll out to “many more” before the end of the year, Iceland said in its latest results.
Despite CEO Tarsem Dhaliwal once declaring that Iceland “don’t want anything to do with Amazon”, there are high hopes for the tie-up as a way of bringing new shoppers to Iceland and Food Warehouse stores. More than 90% of the orders currently placed via Amazon are incremental to its online grocery sales, Iceland said.
Dhaliwal told The Grocer earlier this year that Iceland could be in a position to expand the partnership from September.
“We want incremental sales, but what we don’t want to do is just get customers to migrate to Prime. We’ll only do it if we can have autonomy for the whole supply chain,” he said during an interview in March. “There’s bags of potential.”
An Iceland spokesman declined to comment on the rollout “on this occasion”.
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