Amazon.co.uk's launch into the UK grocery sector is a "mad" concept that has not been thought through effectively, claim industry experts.
Amazon is hoping to grab a share of the sector, which the IGD predicts will double over the next five years from £3.7bn to £7.2bn, but its launch has been panned by rivals and analysts.
Amazon runs a successful grocery channel in the US and has used the same model for the UK.
The new venture, launched in the week of Ocado's IPO, is headed by James Leeson, a former M&S grocery category manager and Walmart buyer.
It uses the same online ordering system as other products, enabling consumers to post reviews and order individually from niche suppliers or in bulk for items such as nappies and washing powders.
Leeson, director of grocery at Amazon.co.uk, said: "The aim is to be the place where customers can find any product they want to buy online, and with the introduction of this new store there are thousands of household, niche, ethnic and international grocery items, all available at the click of a button."
However, consumers will be faced with a raft of different delivery costs as products distributed by Amazon have free delivery and those distributed by third parties are despatched separately, with a range of tariffs. For example, a 500g pack of washed carrots retails at 69p on Amazon but has a £7.50 delivery charge.
"In terms of food shopping, when you compare the website to other online offers, it is not functional at all. They are not offering a time slot for their deliveries, which is ridiculous as many consumers will not want to put up with that," said Verdict analyst Matt Piner.
"For fresh food and vegetables they are not going to have the consumer trust. If you're going to shop for food online this is not convenient. It seems to be the suppliers and smaller retailers taking all the risks."
RBS analyst Justin Scarborough said the concept was currently not a commercial threat to operators. "The initial view is not great," he said, adding that its delivery charges were "mad".
A spokesman for a major UK supermarket chain said the launch was "not well thought through as the service wasn't customer-friendly and did not employ the high levels of customer service associated with most online grocery offers in the UK".
However, suppliers using Amazon were more upbeat. "It is acting like a glorified wholesaler. We dictate how much the product costs and the delivery fee.
The products will be despatched from a huge network of wholesalers, it is up to them when and where they deliver, " said one fine-food supplier.
Amazon goes live with online grocery business (7 July 2010)
As questions over IPO linger, will it be Ocado or Ocadon’t? (3 July 2010)