Amazon has halted the UK expansion of its new supermarket chain, with its first branch set to open in March 2021.
Pioneered by Amazon Go, these stores combine the traditional supermarket with “just walk out” technology without checkouts: there are no cash registers, purchases are automatically authorized and paid for through the Amazon app.
Originally, Amazon planned hundreds of stores in the UK, but after 19 locations, these ambitions were abandoned. Amazon has halted negotiations for dozens of new facilities and abandoned the search for more locations, The Sunday Times reports. New branches will be opened only where lease agreements are already in place.
Very high costs
Sales at new supermarkets have fallen short of expectations and the cost of high-tech infrastructure is too high to compete with other convenience stores.
The current economic climate certainly doesn’t help: British consumers have been hit hard by double-digit inflation and very steep increases in food prices. In addition, management is undergoing a restructuring and tensions are rising with Whole Foods, the chain Amazon bought in 2017, according to Business Insider.
However, Amazon intends to open more new stores in the future, a spokesperson told The Sunday Times. Plans should be re-evaluated within one-and-a-half years. However, this means that Amazon is largely giving up on the UK: a few months ago, the e-commerce giant announced the closure of all its 4 Star stores and bookstores, some of which are in the UK.
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