It looks possible! According to new data from Edge by Ascential, Amazon are set to overtake Tesco as the UK’s largest retailer by 2025 when their UK sales are expected to reach £77.1 billion.
As of 2020 Amazon were sitting at total sales of £36.3 billion and Tesco were almost double that at £64 billion. The important thing to note here though is how quickly Amazon are catching up to their competitor.
Edge by Ascential doesn’t expect the popularity of online shopping to go away even after the pandemic and the UK retail market is expected to grow by £123.6 billion, reaching £500 billion by 2025 with more than half (57.4%) of added sales driven by ecommerce. With Amazon continuing to grow their online retail footprint in the UK as well as expanding into the high street it seems like they are well on track to reach that top spot.
UK grocery retail
With Amazon still being a small player in the edible grocery category is it really feasible? well, In terms of edible grocery, Amazon UK sales grew 17.6% in 2020 and ranked 19th of all UK grocers. By 2025 Amazon is expected to become the 15th biggest seller of edible grocery products, surpassing Shell, McColls, BP and Wilko.
Edge analysts also highlight the rapid growth of ecommerce in UK grocery retail, with online penetration rising from 8.2% to 10.9% by 2025. Leading retailers are adapting to the shift in consumer spending patterns at pace, innovating in last-mile delivery with delivery intermediary partnerships and investing in automation in warehouses.
As for the other supermarkets, the data suggests that Sainsbury’s will hold on to its position as the UK’s third largest retailer and Asda which has recently been purchased from Walmart by the British owners of the EG Group, are expected to grow by 2.4% to £26.7 billion by 2025 to come in at fourth place by 2025.
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“The past year has seen online grocery accelerate in the UK, a market which already had one of the world’s highest penetration rates for online grocery. While Amazon has seen sales grow strongly, so have the larger grocers, with the likes of Tesco, Sainsbury’s and Asda all being able to expand capacity for their online services. Tesco recently revealed a 77% increase in online sales during its 2020-21 full year results after doubling its online capacity to 1.5 million slots a week.
“Growth will also be driven by leading players looking to improve delivery speed, including partnerships with last-mile delivery specialists such as Deliveroo and Uber Eats.
– Deren Baker, CEO at Edge by Ascential