Ocado shares are at a three-year low following the UK launch of Amazon Fresh, which is making it more susceptible to a takeover, according to City experts.

Shares in Ocado dropped by more than 7% this week, as the retailer recorded its third consecutive session of losses.

Clive Black, an analyst with Shore Capital, said Amazon could make a swoop for the online retailer if its share price continued to fall: “Amazon’s first market is London, which is Ocado’s most profitable market, and people subscribing to Amazon Prime will also have a decent overlap with Ocado because they are tech-savvy.

“If Amazon continues what it is doing, it can buy Ocado at a lot cheaper price than it is now because Ocado’s value is declining by the month.”

Ocado has seen its value plummet amid fears that Amazon’s move into the grocery sector will threaten its dominance in the capital.

Amazon began rolling out fresh food deliveries in the UK this week, with the service available to members of the retailer’s Prime subscription service in 69 central and east London postcodes, for an additional £6.99 a month.

It comes after Amazon signed a deal in February with Morrisons, which has agreed to provide wholesale ambient, fresh and frozen products to Amazon, despite already operating its own website in partnership with Ocado.