Amazon withdraws from UK store business, focuses on online boom

The closure of all 19 Amazon Fresh stores in the UK marks a significant chapter in the history of the online giant Amazon: the attempt to conquer the UK grocery market has proven to be challenging. Since the opening of the first cashierless store in West London in 2021, the company has now thrown in the towel and closed its remaining stores in the country. This decision underscores the harsh economic realities in the UK grocery trade, which are not easy to navigate even for one of the world's most powerful retailers. While Amazon continues to operate Amazon Fresh Stores and the upscale Whole Foods Markets in the USA, the strategy in the UK is now increasingly focused on expanding online delivery services. Despite a reduced physical presence in the country, the UK remains an important market for Amazon after the USA and Germany. The company plans to expand grocery delivery via its UK main website and to cooperate with supermarkets such as Morrisons, Co-op, and Iceland, as well as the delivery service Gopuff. Additionally, by the year 2026, five of the Amazon Fresh locations are scheduled to be converted into Whole Foods Market stores. However, analysts estimate that Amazon's market share in the UK grocery world, despite these ambitious plans, remains under one percent—a figure that stands in stark contrast to its high stock market value. The challenges in building a successful infrastructure for grocery distribution in the UK may have been underestimated by Amazon, as reports from former employees and industry experts suggest. In contrast to physical sales discussions, however, partnerships in the online sector could prove to be more profitable, as commissions incur without logistical burdens. Looking towards 2030, Amazon, based on a PwC study, forecasts a significant shift of the grocery trade to the internet. Although the current online share of the total UK grocery market is still at 13.4%, Amazon sees significant growth potential in it. Even though the forecast appears ambitious, Amazon plans to align its online business with this future.