A strategic shift: Since the UK’s largest grocery chains are struggling to compete with the discounters and remain profitable, it’s not surprising that Amazon Fresh—which only has 19 physical locations and relatively expensive technology-filled stores—has scaled back its ambitions, Perkins said.
- Amazon’s shift in strategy comes amid a major reorganization within the retailer’s physical stores division that’s designed to streamline operations and improve collaboration, per Insider.
- Earlier this year, Amazon closed all 68 locations of its bookstores, 4-star shops, and pop-up stores as it sharpened its focus on grocery and Just Walk Out technology.
- The reorganization aims to help Amazon unlock stronger growth from its physical stores, where sales rose 12% in Q2.
The big takeaway: Amazon is right to press pause on its planned expansion of its physical store footprint in the UK given the challenging economic environment. Instead of building out storefronts outfitted with expensive technology, the retailer can look for other ways to grow its UK business such as finding ways to increase its UK Prime membership.
Go further: For more on The Era of Uncertainty, read our report here.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.