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Could Amazon’s High Street store spell problems for small retailers?

1-minute read

Josh Hall

15 February 2017

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Online retail giant Amazon has begun a hunt for London High Street retail space as it launches its expansion into bricks and mortar.

The American company has started to search for shopfronts in prime London locations as part of its move towards physical stores. It recently opened its first such outlet in San Francisco.

The shift in strategy will see Amazon offering cashier-free grocery shopping for consumers in the capital. Purchases will be tracked by sensors, and items will be billed to customers’ Amazon payment accounts as they leave.

Margins squeezed

But the move could cause consternation for small retailers, who have already been buffeted by the impacts of online shopping.

Meanwhile supermarket giants including Tesco have seen their bottom lines squeezed by both Amazon’s move into groceries and the encroaching of European chains like Lidl, which offer heavily discounted items.

Amazon already offers delivery services for food and groceries in some parts of the capital and many areas of the States, and its Dash buttons - physical buttons that are sent to users to press whenever they're out of a certain product - aim to take some of the friction out of repeat orders for items like dishwasher tablets.

Online impact

The impact of the internet has already been felt on the UK’s small shops. It is now estimated that more than half of UK consumers do the majority of their holiday season shopping online, and the figure is rising for day-to-day purchases.

Meanwhile, according to figures released in 2015, just 6 per cent of UK consumers planned to increase the number of in-store purchases they made during the year.

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