“Amazon’s attempts at physical retailing have generally given far too little emphasis to the retail bit,” he argues. Retail consultant and founder of Richard Talks Retail, Richard Hyman, says he wasn’t surprised to hear the roll out of Amazon Fresh has faltered. Sales at convenience stores rose 5.4%, above total till grocery sales growth of 4.5%, while convenience formats also experienced an uplift in volume sales of 2.7%, compared with a decline across supermarkets of 3.8%. UK shoppers spent £3.6bn on groceries at convenience stores in the four weeks to 13 August, accounting for 28.9% of sales.
There’s no doubt inflation and the rising cost of living is having a serious impact on retailers, but data released by NielsenIQ today indicates convenience formats are actually outperforming the rest of the grocery market. The problem it’s trying to solve is queue times or friction in convenience stores in London. According to the Sunday Times, the retailer has walked away from dozens of potential Amazon Fresh sites, following lacklustre sales at its 19 existing London stores. However, this week news broke that Amazon is putting its UK expansion plans on ice. “The combination of gargantuan scale and continued flexibility puts it in pole position to win everything,” he said.
Arguing that omnichannel is a “prerequisite for ultimate retail survival”, Ritson predicted legacy physical retailers like Aldi and Morrisons would struggle more than nimble, digital-first Amazon to pivot their operating models.
Using the same kinds of technologies found in self-driving cars, Amazon is able to track which items customers have picked up in store and charge their card automatically when they walk out.Īt the time, Marketing Week columnist Mark Ritson said Amazon’s success would be “inevitable”. The main attraction of the convenience stores is their cashless and till-less experience. A massive brand, deep pockets, a history of disrupting retail and early success in the US. When leaked documents last November revealed Amazon’s plans to roll out a further 260 Amazon Fresh stores in the UK by the end of 2024, it seemed the online retail giant had everything it needed to succeed as a bricks-and-mortar grocer. Amazon Fresh store in Ealing, London (Photo: Ijby Berg)
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