Tesco is accelerating its convenience store expansion in London by taking over five locations previously operated by Amazon Fresh. The sites, situated in Kensington High Street, Hounslow, Moorgate, Aldgate East, and Wembley, will reopen as Tesco Express outlets ahead of the summer season.
Aggressive Expansion Strategy
The move is part of a broader growth plan, with the supermarket giant targeting more than 70 new Express store openings by March 2027. This follows the addition of 60 Express locations in 2025, bringing its total network across the UK and Ireland to just over 2,000 stores. Tesco's group property director, Nick Johnson, stated the expansion aims to serve more communities.
Shifting Grocery Landscape
The UK grocery market is increasingly focused on convenience, now valued at £48.8 billion. Consumer habits are shifting from large weekly shops to frequent, smaller top-up trips. This trend has drawn intense competition from major chains like Sainsbury's, Asda, Morrisons, and Waitrose, pressuring independent retailers who face higher costs and less purchasing power.
Amazon's retreat from physical grocery stores in the UK, closing all 19 of its Amazon Fresh outlets last September, created the real estate opportunity. The e-commerce giant is now concentrating its grocery efforts on online delivery and partnerships with other retailers.
Strategic Advantages and Risks
Acquiring these ready-made sites allows Tesco to bypass the lengthy process of securing and fitting out new stores in London's competitive property market. However, the convenience sector carries higher operating costs per item compared to large out-of-town supermarkets, relying on consistent high foot traffic for profitability. Expansion also increases exposure to rising rents, wages, and fierce competition on high streets where margins are often slim.
Beyond London, Tesco has identified new Express locations in Bickington (Devon), Pontrhydyrun (Torfaen), Strabane (County Tyrone), and Wallyford (East Lothian), alongside two new full-sized stores in Scotland. The company's shares showed minimal movement in London trading following the announcement.
