Amazon is set to shut down all its grocery stores in the UK, citing the failure of its checkout-free technology to compete with the growing demand for online delivery. The decision will affect 19 Amazon Fresh stores, which were launched less than five years ago. These stores allowed customers to select groceries and leave without stopping at a checkout, as a tracking system automatically charged their bank accounts.
The US tech giant made the decision after a thorough evaluation of its business operations and the substantial growth opportunities in online delivery. As part of its new strategy, Amazon plans to launch a same-day fresh food delivery service next year. The company will completely close 14 Amazon Fresh stores and convert the remaining five into Whole Foods Market shops, an organic grocery chain it acquired in 2017.
Amazon’s “just walk out shopping” technology, which uses deep learning algorithms, cameras, and sensors to track customer purchases, was first introduced in London in 2021. Despite its initial novelty, the technology has failed to gain traction with post-pandemic shoppers. According to Danni Hewson, head of financial analysis at AJ Bell, the checkout-free experience “always felt a little awkward” for customers who have become accustomed to online shopping during the pandemic.
Amazon’s position in the UK market has strengthened since the pandemic, with the company experiencing significant growth in its online delivery services. The closure of its physical grocery stores marks a shift in the company’s strategy, prioritizing online delivery over brick-and-mortar stores. With the launch of its same-day fresh food delivery service, Amazon aims to meet the increasing demand for convenient and fast online shopping.
The decision to shut down Amazon Fresh stores in the UK highlights the company’s efforts to adapt to changing consumer behavior and preferences. As the retail landscape continues to evolve, Amazon’s move is likely to have significant implications for the grocery market and the future of physical retail stores.
