Editor's Comment

How Amazon is acquiring UK stores just as others are closing them

In today’s InternetRetailing newsletter, we report as Amazon acquires UK stores just as retailers including Bonmarché and N Brown Group are seeing footfall weaken. Indeed, N Brown Group is planning to close up to a third of its retail store estate ahead of expected “significant” rises to business rates. At the same time, according to the IMRG, online sales grew at their slowest rate in May for almost two years, a fact that it puts down partly to inflation and partly to the recent election.

Amazon’s move into store ownership, via its acquisition of Whole Foods Market, is long-expected, following its trial in the US of the Amazon Go grocery store and the opening of its own bookshops there. But while the US business will have 460 Whole Foods Market stores, the UK one looks set to start with nine – and this seems a good number in the light of slowing footfall. The retailer has come up with all sorts of ways of getting its products, especially grocery shopping, to its shoppers, but to date has not come up with an answer to the click and collect services that stores can offer as part of a multichannel service. Its rivals in the grocery sector in this country have many more than nine branches and it’s likely that Amazon’s store business will expand too, as long as it proves both viable and profitable. Already UK supermarket businesses have responded to Amazon’s online grocery service, Amazon Fresh, through offering same-day deliveries and collection services. As Amazon innovates in future, it’s likely to take the sector with it, improving service for customers at the same time.

Meanwhile, other retailers are likely to suit their store estates to meet the needs of their own strategies. Most national retailers appear to be envisaging networks of stores that are smaller than they previously had or expected to have, thanks to the growing influence of online shopping. That’s likely to leave a space for new, independent and local retailers to open in areas that do not have the services that local customers require.

Today we feature an interview with Eric Fergusson, director of ecommerce at upmarket department store Liberty, while our guest comment comes from Craig Harper-Ashton of Salmon on how an ecommerce platform can transform a business.

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    3 comments on “How Amazon is acquiring UK stores just as others are closing them

    1. Matthew Treagus said:

      If you start by trying to brilliantly address customer needs digitally (which is often the best way) and then use humans and physical things to fill the things digital can’t do best… then you end up with one sort of business.

      If you try to apply digital to your current distribution models and service channels to make it easier (which it will) then you end up with another sort of business.

      Really import for retailers not to look at what Amazon is doing and take too much comfort by misreading the role of stores or finding too much comfort in the “physical channels add value” argument.

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