Amazon's Grocery Gamble Ends: The Closure of UK Fresh Stores Sparks Mixed Reactions

Amazon is set to close its 19 UK grocery stores less than five years after debuting its innovative till-free shopping model in London. Starting with the closure of three Amazon Fresh locations in 2023, the company has decided to pivot its strategy, converting five of these stores into Whole Foods locations, which it owns. The shift in focus aims to boost its online delivery services in partnership with major brands like Morrisons, Co-op, Iceland, and Gopuff.

The first Amazon grocery store opened in Ealing Broadway in March 2021, allowing customers to shop without traditional checkout lines—using technology such as in-store cameras to charge their Amazon accounts automatically. However, the decision to close stems from a thorough evaluation that revealed greater growth opportunities in online grocery delivery versus physical store operations.

John Boumphrey, Amazon UK’s manager, stated that despite the closures, the firm remains committed to investing in the UK market. If successful, the expansion plans for Whole Foods should result in 12 stores by 2026. Analyst Sucharita Kodali pointed out that Amazon Fresh’s offering might not have been adequately differentiated in a highly competitive market, while Danni Hewson from AJ Bell emphasized that the till-less technology might not have been user-friendly, reinforcing that Amazon’s competitive edge lies in its delivery convenience.

The announcement also raised concerns about employee welfare, with union GMB criticizing Amazon’s treatment of staff amidst these changes. While Amazon has vowed to provide redeployment opportunities for affected employees, the closure highlights the company’s trend of rapidly starting and ending ventures and the challenges inherent in the grocery sector.

A full list of the closing Amazon Fresh locations includes stores in areas such as Aldgate, Hounslow, and Notting Hill Gate, marking a significant change in Amazon’s retail strategy in the grocery space.