Three quarters of Brits would shop at an Amazon grocery store

March 4, 2021

With the first Amazon grocery store opening in Britain today (Thursday), latest research from Mintel reveals that three quarters (76%) of Brits say they would shop at one.

When asked what would encourage them to shop at a physical Amazon grocery store, almost two thirds (63%) of consumers said they would be attracted to discounts for Prime membership*. Meanwhile, a quarter (24%) would like the opportunity to be able to collect online orders. Overall attraction in shopping at these physical stores was higher among younger shoppers, with 84% of 16-34s showing some interest; conversely 39% of over-65s said they would not shop in an Amazon grocery store.

In its US Go and Fresh stores, Amazon has made waves with its ‘Just Walk Out’ technology that allows shoppers a ‘check-out free’ experience. While less than one in five (17%) Brits are drawn to the prospect of cashier-less technology, this rises to 27% of 16-24s. The importance of a fast shopping experience is highlighted by the 44% of consumers who say they have looked to limit their time in-store since the pandemic began.

Just under one in five (18%) consumers purchased food and drink online from Amazon in the past year. Amazon Fresh is regularly used by only 7% of Prime members.

Nick Carroll, Mintel Associate Director of Retail, said:

“In the US, Amazon has been steadily building its footprint in the physical grocery sector through both Amazon Go and the acquisition of Whole Foods. The most intriguing launch in 2020 was the opening of the first Amazon branded supermarket – Fresh. Naturally being an Amazon store it has unique technology woven into it, but notably Amazon has also focused on the basics. So we shouldn’t look at this as a direct assault on the grocery leaders. This is a destination store and a technological show of force from Amazon, designed to give shoppers a glimpse into the future.

“However, Amazon will not be looking at this new store as simply a ‘one-off’ experience for shoppers. It will want to create engagement that keeps shoppers returning by building on the basics it got right in the US, including an aggressive pricing strategy and a full range offering of all the categories you would expect to find, from big name brands to Whole Foods ranges and Amazon’s growing private label offering.

“Amazon Go in the US debuted the ‘Just Walk Out’ technology, which was then improved upon by Amazon Fresh by adding the technology to shopping trolleys in the form of the Dash Cart. In the current climate, it is very practical as shoppers are cautious about spending too long in-store.

“The ultimate ace, from a long-term perspective, is the integration of Prime and Amazon’s wider online business. In the US, Amazon has integrated Prime, through discounts and special offers, into both Go, Fresh and Whole Foods. This has proved popular among shoppers and helps to drive repeat visits.”

Half of Brits now have access to Amazon Prime

Overall, almost nine in ten (89%) Brits shop at Amazon and those with access to Amazon Prime hit a record 50%** in 2020 with almost a quarter (23%) signing up in the last year, according to Mintel research.

Well over a third (36%) of Brits are personally Prime members up from 31% in 2019 and a further 14% share Prime access through someone else’s account. The popularity of Prime has surged in the last few years with over half (52%) of current Prime members joining within the last two years. Scaled to a national level, this places Amazon Prime membership in the UK at around the 21 million mark***.

While Prime Delivery remains the key draw of the scheme, used by 70% of Brits who have access to Prime, Prime Video shows the greatest jump in usage year-on-year – now regularly used by 62% of those with Prime access, compared to 54% in 2019.

Nick Carroll, Mintel Associate Director of Retail, said:

“Amazon Prime is central to Amazon’s consumer facing business. It is the glue which holds the potentially disparate retail, services, and products together and it is a core way for the business to derive more than one revenue stream from its millions of users.

“The pandemic has not only proven fruitful ground for Amazon to drive sales, but also membership of Amazon Prime. Over a third (36%) of Amazon shoppers have used the business more as a result of the pandemic, and 55% of shoppers say Amazon has been like an essential service to them since the pandemic hit the UK.

“The extended period in-home due to the pandemic and the ongoing popularity of content streaming have helped drive usage of Amazon’s on-demand video streaming service Prime Video. Amazon’s willingness to invest in exclusive content, from Borat to the upcoming Lord of the Rings series, shows Prime’s worth to the wider Amazon ecosystem.”

Mintel commissioned research among 2,000 internet users aged 16+ in October 2020.

*Based on 723 internet users aged 16+ who are a member of Amazon Prime.

**inc ‘official’ for example Amazon household, or other ‘unofficial’ which means through account and password sharing.

***Adjusting for the non-internet users that were not part of the online survey in Mintel’s research

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