Amazon to Close Its UK Grocery Stores Amid Shift to Online Delivery Focus
LONDON — Amazon has announced plans to close its 19 UK grocery stores, a move that marks the end of an experiment in brick-and-mortar retailing for the e-commerce giant. The decision comes less than five years after Amazon launched its first UK grocery store in Ealing Broadway in March 2021.
According to sources, five of the stores earmarked for closure will be converted into Whole Foods locations, a fresh and whole food brand owned by Amazon. The company cited a "thorough evaluation of business operations" as the reason behind the decision, stating that it would focus on its online delivery services in the groceries sector.
"We have made the difficult decision to close our UK grocery stores after a thorough evaluation of business operations," an Amazon spokesperson said. "We will continue to invest in our online grocery delivery service, which has seen significant growth and customer adoption."
The closure of the stores is expected to impact 250 staff members who work at the locations. Amazon has launched a consultation process with employees regarding the proposed closures.
Amazon's foray into physical retailing was met with excitement when it first launched its UK grocery stores in 2021. The stores offered a unique shopping experience, where customers could walk in, pick up items, and have their Amazon account billed without the need to check out at a till.
However, the experiment appears to have failed to gain traction, with Amazon citing "substantial growth opportunities" in online delivery as the reason for its decision. The move marks a shift towards focusing on its online grocery delivery services, which include partnerships with Morrisons, Co-op, Iceland, and Gopuff.
Market analysts say the closure of the stores is not surprising, given the challenges faced by brick-and-mortar retailers in recent years. "The retail landscape has changed significantly since Amazon launched its UK grocery stores," said a market analyst. "Online shopping has become increasingly popular, and it's no surprise that Amazon wants to focus on its online delivery services."
Economists estimate that the closure of the stores will have a limited impact on the UK economy, given the relatively small size of the operation. However, the move may signal a shift in consumer behavior towards online shopping, which could have broader implications for the retail industry.
Amazon's decision to close its UK grocery stores comes as the company continues to invest in its online delivery services. The move is expected to be completed by 2024, with Amazon focusing on expanding its online grocery offerings in the coming years.
The closure of the stores marks a significant departure from Amazon's initial foray into physical retailing in the UK. However, it remains to be seen whether the company will continue to experiment with brick-and-mortar locations in other markets.
In related news, Whole Foods has announced plans to expand its presence in the UK market, with several new locations expected to open in the coming months. The move is seen as a strategic effort by Amazon to capitalize on the growing demand for fresh and whole food products in the UK.
As Amazon continues to navigate the changing retail landscape, one thing is clear: the company's focus on online delivery services is here to stay.
*Reporting by Bbc.*
