Amazon took home one quarter of non-food growth last year, and is spreading its reach across a wider range of categories than ever before.
The etail titan’s official filings in the US showed that it took 12% of all UK non-food sales growth. But in a new report by its Evidence Lab, bank UBS estimates that Amazon pocketed around 25% of UK non-food growth on a gross merchandise volume (GMV) basis.
This figure included Amazon Marketplace sales, for which the retailer takes a cut of sales proceeds.
The etail giant is accelerating its market share after a relatively subdued 2013 and 2014. It now represents around 20% of UK general merchandise sales, with those sales coming from a wider range of sectors.
Amazon sales grew 15% in 2015, outpacing the rest of non-food growth, which was at 4%.
UBS believes that fashion retailers Asos, M&S and N Brown Group are most at risk from Amazon. It calculates the scale of the threat by looking at how similar its product offer is to Amazon and how much of a retailer’s sales are online.
| Retailers | Amazon threat | Brexit risk | UK wage/ profit ratio |
|---|---|---|---|
| Associated British Foods | Low | Low | Low |
| Dixons Carphone | Medium | Medium | Medium |
| Kingfisher | Medium | Low | Low |
| Marks & Spencer | High | Medium | Medium |
| Next | Medium | High | Low |
| Mid cap | |||
| Asos | High | Low | Low |
| B&M | Low | High | High |
| N Brown | High | Medium | Low |
| Card Factory | Low | Low | Medium |
| DFS | Low | Low | Low |
| Debenhams | Medium | High | High |
| Dunelm | Medium | Medium | Low |
| Halfords | Medium | Medium | High |
| WH Smith | Low | Medium | Medium |
UBS said in the report: “The specific danger in apparel is that Amazon manages to combine a reasonable selection of branded and own-brand product, as it already has the customer reach and distribution skills.”
It pointed to developments such as Amazon’s launch of seven own-label brands, fashion becoming a more prominent feature on its website and the speculated appointment of ex-M&S womenswear head Frances Russell to Amazon’s fashion team.
The UBS report also calculated the risk of the living wage and Brexit to retailers. Retailers with service cultures and low margins were deemed to be more at risk of the minimum wage while those with a high percentage of products sourced in US dollars would be more at risk if the pound fell another 10% against the dollar.
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