What: Amazon is reported to initiate a European strategy of opening Fresh stores from its UK base.

Why it is important: This might impact relatively quickly IADS members who operate in the supermarket and convenience store categories.

Coresight reports that Amazon is planning to open 260 Fresh grocery stores in the UK by 2024, which would also be a base for further expansion in continental Europe. The analyst also points out that Amazon seems late in the execution of the plan, as in 2021, 9 stores were opened, to be compared with 25 planned.

The format is different from what is seen in the US, as the UK Fresh version is a small convenience store and not the full-range supermarket seen in the US. The UK market is extremely competitive when it comes to groceries: the grocery delivery market penetration (10%) is higher than in the US and all players are quite literate when it comes to home delivery or self-check-out. Furthermore, Europe is quite fragmented in terms of customer habits and national regulations. Blanketing the market with new stores will not be a piece of cake, but should Amazon manage to execute its plan, it will help to increase everyday retail spend share and customer loyalty, even though the growth of the grocery market itself might be more limited than in other categories.

Hundreds of Amazon Fresh stores in Europe?