Amazon.com Inc till-less grocery store may start gradual disruption in UK market,

Amazon.com Inc () has opened a till-less store in London which could be the start of a gradual revolution, a City broker suggested.

The cash and cardless shop, where customers connect to the shelves by logging into their Amazon account via smartphone, represents another stepping-stone in the tech giant’s plan to take a major role in the British grocery market.

READ: Amazon.com opens till-less grocery store in London

“Looking at its progress to date, any such move is likely to be after quite a few steps, so we are not suggesting leaps and bounds at this stage,” analysts at Shore Capital commented.  

“However, the whole British food system would be wise to take note of Amazon’s physical store opening and set their mindset around this being a major player in the sector at some stage through this decade.”

In fact, the e-commerce behemoth has expanded UK food operations in what the broker deemed a “patient and rather delicate” manner, in collaboration with () and .

The phase one of the physical stores rollout – the first ones outside of the US – is understood to involve 25-30 sites, although ShoreCap reckons Amazon plans to grab market share through acquisitions.

“Such M&A activity is not likely to us to be in the pure-play arena, where Amazon’s lack of focus displays interesting perspectives on the poor economics of centralised fulfilment; rather as with the US (where it acquired Whole Food Markets), the acquisition of a British supermarket chain” analysts commented.

“Which chain could that be? Well it may be many from Tesco to Booth’s, the latter of which also trades with Amazon, albeit the strongest commercial relations if current game-theory is applied would lead one to suggest Morrisons, where a formal commercial agreement exists.”

In fact, Morrisons is expected to be the major supplier of product into the Ealing Amazon Fresh outlet.

However, shares in the British chain were flat at 171.7p on Thursday at noon, while landlord Company PLC (), which owns the store, rose 2% to 514p.

Amazon, instead, shed 3% to US$3,005 in premarket trading.