Amazon has pressed pause on a major UK roll-out of its till-free grocery stores, after disappointing sales at its check-out free outlets as the cost-of-living crunch forces shoppers to cut back.
After announcing major expansion plans in the past, the US-based e-commerce giant has reportedly walked away from talks for dozens of potential sites for Amazon Fresh stores, after facing disappointing sales at its 19 check-out-free shops it already has in the UK.
According to a report in the Sunday Times, the company is no longer looking for new locations for Amazon Fresh and has halted plans to open hundreds more sites. Amazon Fresh checkout-free stores use tracking technology to tell which items customers have picked up and allow them to leave without having to pay at a till. Instead, they are charged after leaving the store on their card.
Most existing Fresh stores had fallen short of sales projections, according to the report, while the costs of building the outlets dwarfed those typically associated with other convenience stores. Some store openings would go ahead if leases had already been signed, stated the report.
"We look forward to opening additional Amazon Fresh stores in the near future,” Sunday Times quoted a spokesman as saying, adding that Amazon would look at reviving expansion plans in the next 12 to 18 months.
As Britons reel under decades-high inflation rates, they are watching prices and basket spend closely. Late last month, Amazon said online sales had shrunk for the second quarter in a row, down by 4pc, although altogether, its revenues rose to £102 billion.
Amazon has been focusing more on groceries since the pandemic as more consumers got into the habit of getting home deliveries. In the face of inflation and cost-of-living crisis, the company is reportedly attempting to take a larger share of grocery sales by raising prices less than supermarkets in response to inflation.
It comes months after Amazon announced it was shutting 68 electronics and book stores in the US and the UK, saying it was planning to focus instead on the grocery operations and its clothing store in Los Angeles.
Brian McLister
