The Amazon Fresh concept filled countless headlines in 2021, and soon Tesco, Sainsbury’s and even Aldi opened their own versions, in some cases using Amazon’s very own technology. However, the reality has been far less glamorous. With the exception of a few locations such as Monument and Liverpool St, the stores were often too quiet whenever I visited. Now, most are shutting down, with a few being converted into Whole Foods Market stores—perhaps a delayed closure, since that business hasn’t exactly been a success story for Amazon in the UK either.
In contrast, Amazon’s online machine is running smoothly. Just days ago, the company announced plans to double the number of Prime subscribers in the UK with access to at least three grocery shopping options, thanks to partnerships with Morrisons, Iceland, Co-op and Gopuff.
In the first quarter of this year, one out of every three products sold on Amazon.co.uk fell under what they call “essential grocery items.” According to the company, millions of households choose the convenience of the Amazon ecosystem—where they watch TV, store photos and shop for goods delivered to their homes, in some cases on the same day of purchase.
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Amazon has expanded its assortment, now offering 2 million grocery references to cover different household types and missions—often the same products in smaller formats to encourage repeat purchases from Prime subscribers. Customer surveys also show that delivery speed is a decisive factor driving purchases.
The Amazon Fresh experiment has come to an end, but the company is doubling down on online retail. Tesco currently holds 30% of the channel, and Amazon still has a long way to go before it can threaten Tesco’s leadership. However, its focus on convenience, delivery speed and integration with the Prime ecosystem is allowing it to capture a significant share of the essential goods market.
