There is a palpable sense of glee throughout the industry following yesterday’s announcement that Amazon is to close all 19 of its Amazon Fresh physical convenience stores.

“The high-tech retail experiment has failed!”, “What we hated about Amazon Fresh stores”, “The online retailer just cannot get grocery right”, “Dingy, uninspired and you felt trapped in. Good riddance.” – read LinkedIn commentary on the move. Many claimed to have predicted this would happen years ago.

The schadenfreude isn’t surprising given the e-commerce giant’s big talk at launch. Specifically, concerning the stores’ main (and perhaps only) USP – the Just Walk Out technology which allowed customers to enter, pick their products and leave (having swiped their app or card at a gate somewhere along the journey).

The technology, Amazon said, was primed to “push the state of the art forward”, to “reimagine the in-store shopping experience” and “redefine retail”.

Which, of course, it didn’t. At least not in a convenience store setting.

As then global grocery stores chief at Amazon, Tony Hoggett, who led the move to strip Just Walk Out tech out of US stores, said in an interview with The Grocer in 2023: “Not everything you do in grocery needs reinventing.”

But Fresh’s demise does not mean Amazon is giving up on grocery. Far from it. Removing the distraction of high-tech physical stores means the company can better focus on what it does best: online, delivered fast, at scale.

Amazon’s online focus

It’s already happening. By early next year, the company says more than 80% of UK Prime members – of which there are a reported 13.7 million – will be able to shop at least one of its grocery partners, namely Morrisons, Iceland, Co-op, and Gopuff.

And next year, Amazon will add perishable groceries to the “millions of everyday essentials” already available on Amazon.co.uk for same-day delivery.

“This service will offer customers fresh grocery items including fresh produce, dairy, meat, seafood, baked goods, and frozen foods alongside everyday household essentials, electronics, and other products – all within their Amazon.co.uk basket and delivered within hours,” the company says.

Amazon also plans to more than double the number of UK Prime members who have access to three or more online grocery delivery options through its supermarket partners.

This all comes alongside its £40bn investment in the UK over the next three years, which includes building four new fulfilment centres and new delivery stations nationwide.

“We continue to invent and invest to bring more choice and convenience to UK customers, enabling them to shop for a wide range of everyday essentials and groceries with low prices and fast delivery,” said John Boumphrey, country manager of Amazon UK yesterday.

Amazon – whose website is the fifth most visited in the UK – is already hitting at least £1bn in food sales a year, and has done for the past three years. Not much of that total was coming from its Fresh stores.

Without all the headaches and distraction of London real estate negotiations, inner-city logistics, expensive store fit-outs, on-shelf availability, and constant tweaks to the shopper journey, Amazon can get back to playing to its online strengths.

The four-year Fresh folly is over. But Amazon’s renewed, physical-store-free focus might still make it a formidable force in food.

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