Amazon enters Britain's fresh food market with Morrisons deal

Online retailer Amazon is set to enter the British fresh food market after striking a supply deal with supermarket Morrisons, potentially ramping up competition in the already cut-throat sector.

Morrisons, Britain's fourth biggest supermarket, said on Monday the deal would allow Amazon Prime Now and Amazon Pantry customers access to Morrisons ambient, fresh and frozen products in the coming months.

The British supermarket sector has been convulsed by fierce competition in recent years and analysts have warned that a step up from Amazon could hurt the traditional players even more.

In November Amazon launched a packaged groceries offer for Amazon Prime members, who pay an annual fee of 79 pounds ($109.79).

That was its most ambitious foray into Britain's growing online grocery market but it stopped short of replicating its broader US Amazon Fresh service, which offers about 20,000 chilled, frozen and perishable products and items from local shops.

Retail analysts have speculated the US company was gearing up for a launch of Amazon Fresh in Britain this year.

"The combination of our fresh food expertise with Amazon's online and logistics capabilities is compelling," said Morrisons Chief Executive David Potts.