Amazon’s latest assault on the grocery sector with hundreds of new shops is “not about profit”, an expert has said.
The tech titan intends to create 260 till-free convenience stores across the country to “catch up” to Sainsbury’s and Tesco.
Just nine “Fresh” locations have opened or are set to open this year, but it hopes to add another 60 in 2022, followed by 100 each year in 2023 and 2024.
The plan is “in line with more aggressive opening programmes achieved by convenience stores in the UK in the last five years”, according to a document leaked from Amazon.
READ MORE: Amazon tightens grip on till-free with 2 more stores
It continues: “Tesco’s, Sainsbury’s and Co-op have all exceeded 100 openings per year.”
Ofri Ben-Porat, boss of AI startup Edgify, claimed the company’s move was an “innovation power-play”.
“Instead of undercutting the more established grocery retailers in the market, Amazon is attempting to outshine the competition,” he said.
Ben-Porat argued that Amazon could use AWS, its data “powerhouse”, and sacrifice its bottom line to carve out chunks of the market.
“Existing retailers won’t be able to compete with Amazon’s model, nor can they afford to pay a company to deliver a similar service,” he added.
“If the brand can corner the market and gain the loyalty of UK consumers, it may be able to make its move into grocery a far deeper success.”
Another boost to its battle with supermarkets will be ex-Tesco chief innovation officer Tony Hoggett, who had worked with the grocer for more than three decades.
He will join Amazon in January as its senior vice head of physical stores.
Figures from Edge by Ascential show that Tesco, Britain’s largest retailer, will see its revenue overtaken by Amazon by 2025.
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