It turns out Britain’s supermarket bosses may sleep a little easier.
Amazon’s latest retreat from physical grocery retail, the closure of its remaining 14 Fresh convenience stores, has underscored just how far the American giant still lags in the UK market, according to broker Shore Capital.
The decision brings to an end Amazon’s short-lived push into cashless, cardless grocery outlets, a concept that promised disruption but never caught on with British shoppers.
Amazon Fresh, largely based in London, peaked at about 20 sites. ShoreCap points out that while the format was backed by heavyweight retail talent and initially spooked competitors into trials, the assortment failed to click and Prime membership fees deterred casual customers.
For UK grocers, the closure is a reminder that Amazon remains more Pluto than planet in food retail.
ShoreCap argues the company’s renewed emphasis on online delivery will not reshape the industry in the near term.
While Amazon highlights growth in “everyday essentials,” it still lacks the scale to feature on industry share tables. Analysts note its claim, citing PwC, that 25% of UK grocery sales could move online by 2030 is “truly bonkers,” given penetration sits below 13% today.
Instead, the brokerage believes any serious move into UK groceries would require Amazon to acquire a store-based player. Long-standing links with Wm Morrison Supermarkets, Co-op, Iceland and GoPuff offer some optionality, but an Ocado Group PLC (LSE:OCDO) deal is firmly ruled out.
ShoreCap pointed to lessons from the US, where Amazon itself and Kroger have judged Ocado’s centralised model as too capital-intensive.
Five Amazon Fresh units will be rebadged as Whole Foods, another Amazon bricks-and-mortar brand, doubling its London footprint to 12 outlets, though ShoreCap stresses this remains a niche presence.
For now, the note concludes, Amazon’s grocery push is more rhetoric than revolution.
UK supermarkets from Aldi to Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) retain the overwhelming advantage of scale, accessibility and free entry, leaving Prime’s £95 annual subscription a sticking point for mass adoption.
The sector’s eye will stay on Amazon.co.uk, where price, range and partnerships will matter far more than flashy but short-lived formats.