Amazon has pressed pause on a major UK roll-out of its till-free grocery stores, as the cost of living crunch forces shoppers to cut back.
The US retailer has reportedly walked away from talks for dozens of potential sites for Amazon Fresh stores, after facing disappointing sales at the 19 check-out free shops it already has in the UK.
According to the Sunday Times, the company is no longer looking for new locations for Amazon Fresh, halting plans to open hundreds more sites, which use tracking technology to tell which items customers have picked up and allow them to leave without having to pay at a till. Instead, they are charged after leaving the store on their card.
The moves come just months after Amazon announced it was shutting 68 electronics and book stores in the US and the UK, saying it was planning to focus instead on the grocery operations and its clothing store in Los Angeles.
The Sunday Times said that Amazon would look at reviving expansion plans in the next 12 to 18 months.
A spokesman for the company said: “We look forward to opening additional Amazon Fresh stores in the near future.”
It comes amid a wider downturn in customer spending, with Amazon having not been immune from households cutting back in the face of soaring energy and grocery bills. Late last month, Amazon said online sales had shrunk for the second quarter in a row, down by 4pc, although altogether, its revenues rose 7pc to $121bn (£102bn), thanks to a stronger performance from its cloud computing division.
Since the pandemic hit, Amazon has been placing a larger focus on its grocery business, after more people switched to getting their shopping delivered to their homes. In the UK, the company has been attempting to take a larger share of grocery sales by raising prices less than supermarkets in response to inflation. Figures compiled by the Grocer suggested that, by last month, the average price of a basket in Amazon cost 3.7pc more than last year, while, at Tesco, prices were up 4.9pc. Asda’s prices have increased by 15.2pc over the past year.
Russell Jones, director of Amazon Fresh, said the brand was “committed to making it as easy as possible for customers to find good value products in the face of rising living costs for customers around the country”.