Amazon converts failed Fresh stores to Whole Foods in new UK grocery push

Amazon is dusting itself off for another tilt at Britain’s fiercely competitive grocery sector, this time by converting its abandoned Fresh convenience stores into outlets for Whole Foods Market, the organic chain it acquired for $13.7 billion in 2017.

The move comes barely six months after the US tech giant shuttered 19 of its much-hyped “grab and go” Fresh stores across the country. Launched in 2021 with bold talk of hundreds of locations and a revolution in convenience shopping, the till-free format simply failed to resonate with British consumers. By September last year, the experiment was over.

Now Amazon is hoping Whole Foods can succeed where Fresh could not. The brand, which currently operates seven shops in London, intends to open five additional sites by the end of June. Four of these will occupy former Fresh premises, including a new store in Angel, Islington, which opened this week, alongside planned locations at Wood Wharf in Canary Wharf, Gracechurch Street in the City, Liverpool Street and Notting Hill Gate. A further opening is earmarked for St James’s.

Jade Hoai, executive leader of purchasing at Whole Foods Market UK, said the London expansion reflected confidence in the brand’s offer, particularly in neighbourhoods where customers shop frequently and seek high-quality food as part of their daily routine.

Yet the pivot inevitably raises the question of whether Amazon is merely replacing one struggling format with another. Whole Foods has endured a bruising time on this side of the Atlantic since entering the British market in 2004. Turnover at its UK arm fell seven per cent to £86.4 million in the year to December 2024, while pre-tax losses hit £20 million. Cumulative losses have now surpassed £200 million. The company closed two underperforming stores and its Dartford distribution centre in early 2024 and cut its average headcount from 798 to 608.

High operating costs and stiff competition from established players have consistently undermined the chain’s efforts, and its premium pricing has proved a hard sell in a market dominated by the discounters Aldi and Lidl at one end and well-entrenched giants such as Tesco and Sainsbury’s at the other.

The picture is markedly different in the United States, where Whole Foods has enjoyed steady growth under Amazon’s stewardship. The American operation has expanded its market share by aggressively cutting prices and rolling out smaller-format stores, successfully shedding the nickname “Whole Paycheque”, a longstanding joke that a single bag of groceries there could swallow an entire salary.

Whether that formula can translate to the UK remains to be seen. Hoai pointed to what she described as a clear shift in consumer behaviour, with growing demand for quality, transparency and a more considered retail experience.

The new Angel store, spanning 3,600 square feet, features a hot food counter, self-serve coffee and an Amazon kiosk. Delivery through Deliveroo is expected to follow shortly.

For Amazon, the stakes extend beyond groceries. The company has long viewed physical retail as a gateway to embedding itself more deeply in consumers’ daily lives and driving subscriptions to its Prime service. But its track record in British bricks-and-mortar retailing offers little cause for confidence, and the decision to pour further investment into a brand that has bled more than £200 million in losses will test the patience even of a company with pockets as deep as Amazon’s.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.