“I love Amazon but…” seems to be the view of many US customers who have had a while to road test the etail mammoth’s Fresh grocery service.

Cost, out of stocks, substitutions and variable quality of fruit and vegetables are the main gripes – and over there, customers are also expected to tip the driver – $4 (£3) is recommended – on top of Prime and monthly subscriptions.

So how will Fresh fare in the UK? Well, it’s an expensive if potentially highly convenient option.

You have to be a Prime member, costing £79 a year to sign up and there’s a monthly fee of £6.99. So that’s £163 before you pay for delivery if the order is below £40.

Compare that with Sainsbury’s £60 ’annual anytime pass’ and prices really do have to be a lot keener to make it add up.

A recent study suggested that Amazon was around 20% cheaper than the big four and 30% less than Ocado, which arguably will be the biggest loser in this battle.

So if this differential can be sustained, maybe Amazon can succeed on price, but what about range and service?

More than money

Stocking a whopping 130,000 SKUs, the selection dwarfs anything available elsewhere and includes “artisanal products” from specialists, including fishmongers, cheese shops and my own local butcher, Lidgate.

Next time they have a barbecue, if half of London decides to order their delicious teriyaki chicken supremes, then Amazon is in trouble. There is no way that these sorts of shops could ever meet that level of demand.

Which brings me on to weather and supply chain.

“Can Amazon create the flexible supply chains and relationships needed to respond to wildly varying volumes? And if it can’t, what are the implications for waste?”

Fran Minogue, Clarity Search

As a leading grocery chief executive said to me: “British retailers have had years of experience in modelling and demand planning. Weather is the biggest factor, and weather is regional. We sold 20 times more burgers two weeks ago than we did last week – it’s very challenging if you don’t know what you’re doing.”

Infrastructure is also an issue. Can Amazon create the flexible supply chains and relationships needed to respond to wildly varying volumes? And if it can’t, what are the implications for waste?

It would be foolish to bet against Amazon – it’s a formidable operator, but the UK is the most sophisticated and competitive grocery market in the world. The big four, Waitrose, the Co-op, Aldi and Lidl will not sit back and wait for Amazon to steal share.

But responding to this new threat will take another bite out of already wafer-thin margins, and that is one of the key issues – Amazon has deep pockets and can play to very different rules.

Ajay Kavan, vice-president in charge of Fresh, has said Amazon will take a measured approach to how it evolves the service. Perhaps in London where speed and ease are often more important than money, a more affluent consumer will embrace this ambitious new service – although I’m not sure how they will react to Morrisons own-label instead of Waitrose.

  • Fran Minogue is the managing partner of Clarity Search