As 2023 draws to a close, we take a look at Grocery Gazette’s best bits. Today, we revisit our interview with Amazon Fresh director Matt Birch last month when he unveils his big plans for the online grocer.
It’s been two and a half years since Amazon Fresh launched its first store in the UK and seven years since it made its online debut.
Despite the traditional grocers quaking in their boots at the prospect at the online giant stepping into food, Amazon Fresh has yet to have a widescale impact.
However, Matt Birch – the ex-Sainsbury’s and Central Co-op executive who has been leading Amazon Fresh in the UK since 2019 – is aiming to change that.
The online giant is launching what Birch terms its “biggest price cut campaign yet” as it aims to attract festive shoppers.
The price reductions will cover products such as Andrex, Coca Cola and Gordon’s gin with up to 25% off.
“We’re providing really strong value for customers when they need it,” Birch says.
However, it’s not just in value where Amazon is placing its bets. It is also bolstering its convenience and launching Christmas reservation slots before customers build their big festive food basket.
Birch says this will bring reassurance to customers that their “super-fast same-day delivery slot is there, as well as having everything they need”.
Back on the expansion trail
It appears to have been a year of change for Amazon Fresh.
Some UK stores have closed, including its very first till-less store in the UK, which opened to much fanfare in Ealing Broadway in March 2021, and there has been some tinkering to its format amid Amazon CEO Andy Jassy’s claim that it needed to be more clearly differentiated and offer greater “economic value”.
The online giant added manned checkouts alongside its Just Walk Out technology in its new stores in Croydon and Monument at the turn of the year and has even retrofitted its Angel Islington store with pay terminals in what experts perceive as a bid to remove barriers to entry.
PwC director, retail strategy Kien Tan said of the changes: “Amazon has tried everything from promotions to viral TikToks to try to get people to shop at its grocery stores but ultimately its biggest barrier is the gate at the front.
“It is clearly trialing different ways to get people into stores to see if it can change customer behaviour and should be applauded for trying new things.”
But after a global pause on expansion of Amazon Fresh, its UK business is very much back in growth mode.
After opening an Amazon Fresh in Liverpool Street in September and in Moorgate in August, it will unveil its Notting Hill Gate store on 29 November.
Amazon Fresh
However, the store is just its 20th in the UK, a far cry from the 260 that the grocer allegedly planned to open by 2025.
According to documents seen by Business Insider back in 2021, Amazon was looking to open 60 stores in 2022, 100 in 2023, and 100 more in 2024 “in line with more aggressive opening programmes achieved by convenience stores in the UK in the last five years”, the files said.
Amazon has never confirmed its expansion ambitions but Birch says Fresh is “growing really well and we’re really happy with it”.
So, what is the online giant’s aim now?
Birch explains: “We want to build a best-in-class grocery experience for our customers where Amazon is the first choice for selection, value and convenience.”
He considers: “What would it be like if shoppers could get all their grocery needs served through fewer retailer relationships?”
“Maybe even just one app or one payment method that can serve all different types of customer missions and needs like lunch on-the-go, a big weekly shop or a meal for tonight delivered fast?
“We’re actually a lot closer to this than I think a lot of people realise. When you think about a customer in London today, they can buy food for all sorts of needs and occasions with Amazon.”
Indeed, as well as expanding its store portfolio, the retailer is continually widening its product range having recently introduced hundreds of new lines.
“Now, selection is even better at covering all sorts of missions,” Birch adds
Will Amazon Fresh ever rival the Big 4?
But with expansion behind original projections, will Amazon ever become a major threat to the UK’s major supermarket chains?
Birch says that isn’t its focus and points out that its partnerships with some of those grocery businesses, such as Morrisons, Co-op and Iceland are “really important to us”.
“We know customers love being able to access their selection through the convenience of Amazon and our speed of delivery,” he says.
As of September 2021, Amazon Prime customers were able to do their full Co-op grocery shop on Amazon.co.uk with same-day delivery and this has since been extended to both Morrisons and, as of September, Iceland. It emerged last month that it is also in talks with Waitrose to ink a similar deal.
Interestingly, rather than harnessing its own delivery prowess, Amazon has opted for yet another partnership to help it delivery super speedy groceries to customers’ homes.
In September, Amazon launched on the Deliveroo app, offering a range of more than 1,000 items for delivery from its store in Hoxton.
Birch explains: “We think much more about how we can solve customer problems and needs within grocery using all the different strings to our bow that we have here.”
This customer-centric view and willingness to collaborate has seen Amazon emerge as a valuable partner to many supermarkets rather than the big bad disruptor that many expected.
