The Sainsbury deal to buy Asda, announced on Monday, comes as retailers on both sides of the Atlantic grapple with heightened competition from the discounters such as Germany's Aldi and Lidl and e-commerce giant Amazon.
The marriage of Britain's second- and third-largest grocers will not immediately impact Amazon's food offering which remains small in Britain. The biggest impact will come away from the grocery aisle, in the area of general merchandise, where Amazon and Sainsbury's already go head-to-head.
Britons are among the world's most comfortable online shoppers. About 22 percent of non-food purchases are already done online, the highest percentage for any country aside from South Korea, according to Shore Capital analyst Clive Black. He estimates that Amazon has about 40 percent of that market.
"The U.K. is a very important market in terms of Amazon's international ambitions ... and will remain an important market," Black said. "This proposed merger makes it a little bit more competitive, but I don't think Jeff Bezos will be losing sleep over it."
