Amazon has put a stop to the expansion of its cashless Fresh supermarkets in Britain, as sales are disappointing and costs are too high. This is a serious setback for the American retail giant.
Dozens of locations unused
Amazon has halted the British expansion of its Fresh supermarket chain, of which the first branch opened in March 2021. The stores combine a traditional supermarket with the cashless ‘just walk out’ technology pioneered by Amazon Go: there are no cash registers, purchases are automatically recognised and paid for via the Amazon app.
Originally, Amazon planned hundreds of similar shops in the United Kingdom, but after barely nineteen locations, these ambitions have already been abandoned. Amazon is said to have ceased negotiations for dozens of new premises and to have abandoned the search for more locations, The Sunday Times newspaper reports. Only where leases have already been signed will new branches be opened.
Costs too high
Sales in cashless supermarkets are said to be below expectations and the cost of the high-tech infrastructure too high to compete with other convenience stores. The current economic climate certainly does not help: British consumers are being hit hard in the wallet by a double-digit inflation and very sharp increases in food prices. In addition, management is said to be undergoing restructuring and, according to Business Insider, tensions are mounting with Whole Foods, the organic chain acquired by Amazon in 2017.
Nevertheless, Amazon is looking to open additional Fresh shops in the near future, a spokeswoman told The Sunday Times. The plans would be reassessed in a good year and a half. However, this means that Amazon is largely giving up on the UK: a few months ago, the e-commerce giant already announced the closure of all its 4 Star and book shops, some of which are in the UK.