Amazon to sell groceries

AMAZON is drawing up plans to challenge Tesco and the other big supermarkets with a home grocery delivery service.

The world's biggest online retailer, best known for selling books and CDs, will launch with a range of 45,000 non-perishable food, drink and household items.

Unlike existing delivery services such as Ocado and Tesco.com it will not initially sell fresh food but is testing this in Seattle, where Amazon is based.

Analyst Alex Burmaster, of research firm Nielsen Online, told the trade journal Retail Week: "Supermarkets should be nervous as the Amazon name is so well known and is one of the original, old-school online brands."

But it would need to convince customers that it could be as reliable with groceries as it is with books and DVDs, he said.

The move would see a reversal of trends in which supermarkets have moved into selling everything from electrical items to insurance.

Mr Burmaster added: "[Amazon] has been becoming more of a one-stop shop." Last year it introduced 20,000 fashion lines from brands such as La Senza and Puma.