Amazon hopes to transform another sector of the British retail market by bringing a checkout-free food store to London.
Later this year, the US retailer is expected to open an Amazon Go site in the west London enclave of Notting Hill, more than two years after its first automated outlet opened in Seattle, Washington.
The hi-tech store could ramp up pressure on traditional British supermarkets, which are already struggling to compete with the rise of discounters such as Aldi, Lidl and B&M as well as the switch to online shopping, which is popular with shoppers but often unprofitable.
At Amazon Go in the US, shoppers gain access by scanning their phone, with the Amazon Go app open, at the store’s entry gate. A series of cameras and sensors automatically log anything picked up in store to a shoppers’ Amazon online basket. Customers’ Amazon accounts are then billed when they leave the shop.
There are now 25 Amazon Go stores, in Chicago, New York, Seattle and San Francisco, most of which are small sites focused on convenience foods. But Amazon recently opened a 1,000 sq metre outlet – in Seattle – more akin to a supermarket.
Amazon has said that food is one of its key target markets in the UK, where it already operates seven grocery stores through Whole Foods Market, which it bought in 2017. It also delivers groceries via its Fresh service as well as to Prime subscribers.
The company has also invested cash in Deliveroo, the London-based takeaway delivery service, although this tie-up is the subject of a competition watchdog inquiry which could force it to offload some of its stake.
The Go store would be another high-profile move into the UK. But Brits may not fall instantly in love with an automated shop. “It’s brilliant technology and experience, but Amazon are not very good at running shops,” says Bryan Roberts, a retail analyst who has visited Amazon Go in the US. He says the American stores have been dogged by stock shortages and other issues. “If you have got a local captive audience, all of whom have got the app and can walk in and walk out, it’s great,” he says. But he suggests Amazon may struggle to draw in huge crowds prepared to sign up to an account.
In the UK, Tesco and Sainsbury’s have both tested cashless stores in London. Sainsbury’s ditched its test after it found shoppers less than keen to sign up to its special app, which put off passing trade. Automated tills and other existing technologies are already quick to use, meaning there is little incentive for shoppers to sign up to something new.
But attitudes may be beginning to change. As well as those two supermarkets, Waitrose and the Co-op have now launched or trialled apps that allow shoppers to pay using a mobile phone in their stores.
Roberts suggests that Amazon may be using the Go store to market its technology to other retailers rather than aiming to open hundreds of its own sites. There are also rumours that Amazon may work with Morrisons, the Bradford-based supermarket that currently supplies goods to its Fresh service in the UK, to keep its British Go store supplied. It is an experiment that could bring yet more big changes to British retail.
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