What's going on with Amazon Fresh (in the UK)--one closed, 2 opened, total 19

One (Dalston, a poorly chosen location in London) closed, 2 opened (one in a far suburb of Croydon)

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I’ll give Amazon this. They continue to tinker before scaling broadly. Will they find the scalable model they are looking for?

Challenge in the UK is Tesco, Sainsbury, CoOp (blue), and others made a “land grab” for inner city convenience/fuel stations in the early 2000’s, starving Amazon of the best sites. Sites for bigger stores are also hard to come by (and Aldi/Lidl are also in that race).

Tesco and others are experimenting with equivalent “just walk out” tech, could retrofit existing stores.

Amazon will either have to grow slowly and painfully (run on shoestring supply chain to break even) or take someone over.

A supply chain takeover (to get stock scalability) could be possible (Bestway is the obvious candidate here, there are others but Booker is part of Tesco, Nisa-Today is a mutual)

or a grocery retailer (Iceland is a well run business and would give Amazon a supply chain and a good set of sites across the UK the right size, Morrisons is PE held and could be available for the right price but have been a candidate for a decade for an Amazon takeover).

The other UK grocery retailers are too small, too big or have too much baggage (M&S/Ocado has retail and tech attractions but would be expensive and come with a lot of baggage, and probably an anti-trust reference to get the deal approved). CoOp (blue) and Waitrose have largely takeover proof corporate structures.

Speaking of… I just got this note from Amazon Fresh:

image

Whole Foods fee has bee $10 for a while, so I stopped using them and switched primarily to Fresh.
This could move me to Target which is only 2 blocks away from my house.

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Even delivery fees in the US are more expensive than the UK, despite wages, fuel being significantly more expensive in the UK than the US.

Tesco, Sainsburys maximum fee is around $8 including tax (some timed slots are cheaper), if you order more than 2-3 times a month you can pay a monthly delivery subscription for free delivery once a day min order £40 (and this usually gives you early access to slot booking at peak periods like Christmas, during pandemic times those with subscription got first access to slots; for a while you couldn’t start a subscription).

Other supermarkets have free delivery but a high minimum order value (ÂŁ90 is typical)

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I hadn’t seen this news before I wrote the above
Bestway Group acquires shares–3.45%–in Sainsbury’s

(The sovereign wealth fund of the state of Qatar owns 25% of Sainsbury’s, if I recall correctly).

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Further speculation that Sainsbury’s may soon be a takeover candidate

https://www.linkedin.com/posts/brian-moore-038b8112_takeover-merge-activity-7026596986170535936-q6Tk following on from PE enabled takeovers in the last few years of Asda and Morrisons

And Qatar sovereign wealth fund quoted as 14% not 25%, but another significant single investor holding 10%.

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