Amazon is on track to account for a 58.2% rise in UK retail revenue over the next five years, a new study by GlobalData has found.
Amazon will be worth £15.7 billion (€17.7 billion) by 2024, GlobalData said, meaning the retailer will account for one fifth of UK online spend.
Grocery Boost
According to the GlobalData report, Amazon Strategic Review - 2019, the online giant is likely to see the strongest growth from its food and grocery arm, which will rise 174.7 between 2019 and 2024.
This is well ahead of the overall grocery sector, which is forecast to grow by the 15.5% over the same period.
“Although food has not historically been a focal point for the online pureplay, it will prioritise investment in this sector through ramping up its Amazon Fresh operation, developing Whole Foods and introducing its checkout-free Amazon Go stores,” commented James Yacoub, retail analyst for GlobalData.
“Overall Amazon will grow its total online market share to 19.8% in 2024, up from 16.6% in 2019,” he added.
Distribution Network
Amazon aims to gain more control over its distribution network by investing in more fulfilment centres, transport vehicles and automation, helping it to streamline its operating expenses in the long run, according to GlobalData.
This has been evidenced by its acquisition strategy, such as the recent purchase of robotics and automation specialist Dispatch.
“Amazon has invested in the latest thematic trends in retail from the onset of its growth, with a particular focus on its delivery infrastructure, artificial intelligence and automation,” said Yacoub.
Prime Subscribers
Amazon has also benefited from a growing number of Prime subscribers, with 19.4% of UK online shoppers now signed up to the service.
“Amazon will continue to optimise its efficiency in its last mile delivery which remains to be the most costly aspect of fulfilment,” said Yacoub.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
