Amazon has announced plans to invest £40 billion (US$54 billion) in the UK over the next three years.

This investment marks a continuation of its expansion in the UK, which is its third-largest market after the United States and Germany.

The investment includes the construction of two new fulfillment centers in the East Midlands, scheduled to open in 2027.

Additionally, previously announced sites in Hull and Northampton are expected to open in 2025 and 2026, creating 2,000 jobs each. Currently, Amazon employs 75,000 people in the UK.

Alongside the new centers, Amazon will establish new delivery stations and upgrade its existing network of over 100 operations buildings.

Prime Minister Keir Starmer said that Amazon’s investment is an endorsement of the UK as a business destination.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Accelerating investment trajectory signals strategic UK importance

Amazon’s £40 billion commitment represents a dramatic acceleration from its historical UK investment pace.

From 2010 to 2018, Amazon invested £18 billion in the UK over eight years 1, whereas this new announcement promises more than double that amount in just three years.

This investment coincides with Amazon’s workforce expansion from 27,500 employees in 2018 to 75,000 today, establishing it as a top-ten private sector employer in the country 12.

The scale of this commitment highlights the UK’s strategic importance as Amazon’s third-largest market globally, behind only the US and Germany, with the company following its established pattern of prioritizing long-term growth over immediate profits.

Amazon’s continued investment in physical infrastructure reflects its ongoing commitment to an integrated digital-physical retail strategy, distinguishing it from other tech companies that focus primarily on data centers.

2️⃣ Regional development strategy targets high-unemployment areas

Amazon’s new fulfillment centers in the East Midlands, Hull, and Northampton continue the company’s established pattern of investing in regions with historically higher unemployment rates.

As of 2018, over 20,000 of Amazon’s UK jobs were already located in regions with higher unemployment, particularly in the North of England and the Midlands 1, with the new investment reinforcing this regional development approach.

The location choices provide economic multiplier effects, with Amazon’s previous UK investments indirectly supporting approximately 240,000 jobs through supply chain activities and marketplace seller opportunities 1.

This regional investment approach also connects to Amazon’s community engagement strategy, which includes public tours of fulfillment centers and educational programs that have provided free computer science education to half a million UK students 2.

3️⃣ Significant vote of confidence amid challenging FDI landscape

Amazon’s £40 billion investment comes at a critical time when the UK experienced a 13% decline in foreign direct investment projects in 2024, though it still maintained its position as the second-highest recipient in Europe 3.

The investment represents one of the largest single-company commitments announced following the UK’s 2024 International Investment Summit, which secured a total of £63 billion in private investments across all sectors 4.

This pattern of continued investment by established multinational companies contrasts with the overall European FDI landscape, which has reached a nine-year low and remains significantly below pre-pandemic levels 3.

Amazon’s commitment includes substantial AWS cloud infrastructure investment (£8 billion), reflecting a broader trend where technology companies are making major data center investments in the UK despite the general FDI downturn 4.

For the newly elected Labour government, which has prioritized economic growth through foreign investment, Amazon’s announcement represents a significant early policy win and validates their industrial strategy approach.

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