Amazon Halts All New Amazon Fresh Just Walk Out Stores

[ClownLoach]

Noticed a big change tonight in their online banner advertising. Amazon Fresh has been running $20 off, or 20% off and so on offers for Prime members pretty much forever in an effort to drive traffic to these moribund stores.

The fine print on the newly posted offer, 25% off $50+ for Prime members, explicitly says "On your First Visit." I would assume this means that these aggressive discount offers will no longer work if you have shopped previously as a Prime member.

I think the aggressive offers were bringing in some traffic albeit frustrating the hell out of shoppers who have to use the just doesn't work, I mean Just Walk Out checkout and find they didn't get the discount. On the other hand these stores have become so wildly overpriced that they surely were baking the 20% or $20 off or whatever discount into the shelf prices on top of baked in delivery costs. So maybe they are trying a new pricing model to get the shelves down to a point where one could compare them favorably against shelves at Walmart and Winco and such?

I have a hunch however that this could cause a further decline in traffic.

I also noticed that all Amazon delivery vans that had promotional messaging for Amazon Fresh stores have removed it. There were some with banana stickers all over them and some comment like "super fresh supermarkets - Amazon Fresh" plus another that was so unmemorable I have forgotten it. If they intend to pull the plug on this failing operation then at least they've already removed all those ads...

[mjhale]

Construction has completed on what is likely an Amazon Fresh store in Fair Lakes Shopping Center near Fairfax, VA. The store was first rumored in 2022. The completed space has the same facade as the location in the City of Fairfax that opened in 2022. However, there is no actual signage on the store and the front windows are covered with no indication that something is coming soon. The building signage and other things may be coming. However, I will be interested to see how long it takes for this store to open, if it opens at all, given all of the ups and downs Amazon's grocery stores have gone through. The Amazon Fresh store in Fairfax City sat completed and in a similar state to how the Fair Lakes space looks for at least six months before actually opening. If Amazon Fresh does open in Fair Lakes, its going to be kind of grocery central. In additional to Amazon Fresh, Fair Lakes has Aldi, Target, BJ's and a Walmart Supercenter.

[storewanderer]

Went to one of the remodeled stores in a Chicago suburb. They have billboards and low-budget banners listing a grand reopening of Amazon Fresh "Grocery Store." Also radio ads.

Anyway, the store late morning was almost deserted, and that included only a couple order pickers. Produce looked pretty bad but was stocked. Salad bar was out, deli stocked but had closed signs on the counter, no pizza. Service bells on the counter. No staffing visible. Krispy Kreme is an extension of bakery and had two uniformed employees present at that counter. It has its own register, accepting Tap and Krispy app rewards like any other location.

Center store it appears they've gotten a grocery wholesaler to come and merchandise various sections for them. It feels like an independent grocery store in mix and pricing (too high). There were few to no out of stocks in center store. It felt more like a regular store.

Self checkout and regular checkout available, no customers, so no wait for either. They still don't accept Tap. Overall, there still zero reason to shop here.

Went to one additional unremodeled location with the cameras all over the floor. Same old crap execution and format there. Felt like half of center store was out of stock. Probably more like 20% was out of stock. It looked terrible. Messy. Disorganized. Pricing seemed better than the remodeled location with quite a few really good specials sprinkled all over the store 75%+ off. Service meat and seafood closed here too and the counter and prep area is being used to store various supplies or overstock. Looks horrible. No self checkout.

Overall this format seems very troubled. No idea who decided to close service meat, but that was a bad move. They also need to engage customers at bakery and deli which they aren't doing if it isn't even open during prime deli shopping hours late morning (go look at the crowd of retirement age customers at a service deli at any legitimate grocer in Chicago area late morning and you will see what I mean. That's peak hours for lunchmeat sales.

[ClownLoach]

Went to one of the remodeled stores in a Chicago suburb. They have billboards and low-budget banners listing a grand reopening of Amazon Fresh "Grocery Store." Also radio ads.

Anyway, the store late morning was almost deserted, and that included only a couple order pickers. Produce looked pretty bad but was stocked. Salad bar was out, deli stocked but had closed signs on the counter, no pizza. Service bells on the counter. No staffing visible. Krispy Kreme is an extension of bakery and had two uniformed employees present at that counter. It has its own register, accepting Tap and Krispy app rewards like any other location.

Center store it appears they've gotten a grocery wholesaler to come and merchandise various sections for them. It feels like an independent grocery store in mix and pricing (too high). There were few to no out of stocks in center store. It felt more like a regular store.

Self checkout and regular checkout available, no customers, so no wait for either. They still don't accept Tap. Overall, there still zero reason to shop here.

Went to one additional unremodeled location with the cameras all over the floor. Same old crap execution and format there. Felt like half of center store was out of stock. Probably more like 20% was out of stock. It looked terrible. Messy. Disorganized. Pricing seemed better than the remodeled location with quite a few really good specials sprinkled all over the store 75%+ off. Service meat and seafood closed here too and the counter and prep area is being used to store various supplies or overstock. Looks horrible. No self checkout.

Overall this format seems very troubled. No idea who decided to close service meat, but that was a bad move. They also need to engage customers at bakery and deli which they aren't doing if it isn't even open during prime deli shopping hours late morning (go look at the crowd of retirement age customers at a service deli at any legitimate grocer in Chicago area late morning and you will see what I mean. That's peak hours for lunchmeat sales.

I don't know what to say about the service meat, but it was not good in California stores from day one. Meat cutting is a skill and they don't have it. Stater Bros is a perfect example of a grocery store that doesn't necessarily feature top grades; many of their sale items are just select grade but because they're cut properly, correct thickness and trimming the quality is better than a "choice" steak cut at a bad angle, irregular thickness and no trimming. The real issue is that it sounds like they care so little about the in store business at this time that they closed the counter and didn't remove it and remerchandise the space. Personally I would be accepting of the removal in their type of smaller, mostly self service shopping environment - but the image portrayed by a empty case with a closed sign is that the entire store is going to match the case any day now.

My understanding is that they were using the nearest WFM as a commissary for these stores so the service counter meats were probably cut there. As much as I might criticize the big grocery chains, I can't think of the last time I purchased beef and it spoiled early or anything like that. But I had a couple experiences with Whole Foods meat where it was developing green and brown spoilage or rot within just a few hours of bringing it home and as a result I stopped buying any meats from them. Clearly WFM has issues with equipment maintenance, cross-contamination, and sanitation as my bad experiences were at two different stores.

Either way, it's amazing to see how well this chain started out and how quickly they let it crash and burn. Obviously the pricing wasn't sustainable and neither was the stsffing level, but the stores were obviously not designed to run on a substantially lower labor model which is still baffling considering all the technology and automation. When they started pulling the labor out of the stores then the quality started to suffer and that absolutely killed the delivery business. I do not believe that the COVID rebound back to retail did this because people were always shopping for food since the groceries were always open; it seems that Whole Foods stores still do a lot of delivery but Fresh stores went from overflowing staging areas to a big empty room up front. And then they managed to break the patience of their most loyal customers by trying to force Just Walk Out technology on them which nobody wanted.

At some point Amazon needs to exit this. They should go out and say that Amazon Fresh has been an amazing smash success, so successful in fact that all brick and mortar locations will close immediately to the public amid a conversion of the concept to a delivery only model.

[veteran+]

Sometimes it is not overtly noticeable....................but one can feel when an operator does not love selling Food and/or does not have the knowledge to sell Food.

Amazon is Prime (lol) example of this. And frankly so is Target.

Amazon has not learned anything from the "Foodie" company they bought, Whole Foods.

[mbz321]

Overall this format seems very troubled. No idea who decided to close service meat, but that was a bad move. They also need to engage customers at bakery and deli which they aren't doing if it isn't even open during prime deli shopping hours late morning (go look at the crowd of retirement age customers at a service deli at any legitimate grocer in Chicago area late morning and you will see what I mean. That's peak hours for lunchmeat sales.

I mean, everything in general with Fresh has been pretty much a bad move, but I'm not sure a staffed meat counter was even being utilized all that much. In the handful of times I've been into my nearest Amazon Fresh store here in PA, I have never seen a single customer remotely near the counter. Maybe one or two customers at the Deli (at most), and unless your store is different, there is no real Bakery to speak of here...just some basic pastries that are surely just baked from frozen, and trucked-in cakes.

[storewanderer]

I mean, everything in general with Fresh has been pretty much a bad move, but I'm not sure a staffed meat counter was even being utilized all that much. In the handful of times I've been into my nearest Amazon Fresh store here in PA, I have never seen a single customer remotely near the counter. Maybe one or two customers at the Deli (at most), and unless your store is different, there is no real Bakery to speak of here...just some basic pastries that are surely just baked from frozen, and trucked-in cakes.

Same here, I never have seen anyone actually buying anything from that service meat counter...

Deli gets some traffic, mostly pizza/salad business and maybe quite a bit of that is employees/order delivery people? Also I suspect average ticket is under $5 which isn't enough to justify the labor or space. Bakery has limited items they bake in the store from frozen (more limited than most stores but perhaps a little more than Wal Mart now that Wal Mart's cookies are all fully baked then frozen and thaw to sell), the cookies are actually quite good. The 89cent french bread they like to advertise seems to be a thaw and serve product at some stores but seems to be warmed up/made in store at others. They do bake some bread but I think most of it is par baked style (La Brea like stuff).

[ClownLoach]

Sometimes it is not overtly noticeable....................but one can feel when an operator does not love selling Food and/or does not have the knowledge to sell Food.

Amazon is Prime (lol) example of this. And frankly so is Target.

Amazon has not learned anything from the "Foodie" company they bought, Whole Foods.

Somewhat off topic I know...

I keep mentioning that Target seems to be bringing SuperTarget back to life, slowly but gradually.

I have two SuperTarget locations within ten miles of my house, one that has been very low volume and the other is the top "Super" location in the entire company.

Recently I was in the "slower" location and they are actually using all that expensive bakery and deli equipment again, and staffing the department. Unfortunately this is a store that is just hanging on as it's been standing alone, waiting for its shopping center to complete for 15+ years (finally happening by next Summer), so there isn't a lot of quantity on any shelf although overall in stock percentage is probably 98% storewide and recovery is great now. Anyway they have a large table display of fresh baked in store breads now, and I was blown away by how good they were. The French rolls for sandwiches were a good size and delicious, and they had good looking sourdough as well as a decent selection of other breads. I am not sure if any of it is truly 'scratch baked' but it was fresh, tasty, fairly priced bread and light years better than any of the frozen garbage they have at Ralphs or Albertsons/Vons these days. The Ralphs product is small, overpriced, and magically molds within 24 hours. Albertsons/Vons I am convinced they follow the famous Wendy's French fry adage "they aren't old until they're sold" and as a result they have a perpetual two day old plus bakery rack with today's fresh stuff still on a rack behind the counter. The deli has been stocked with that Kretchmar brand I haven't tried before but the prices were very reasonable ($6-7 less per pound than Boars Head at Ralphs) so I will give them a try next time as they actually will slice to order and have about twice as many meats/cheeses available vs what is Pre-cut in bags.

They have a long way to go still but there are definitely signs of life as they might be recognizing the deteriorating quality of the big chains and sensing an opportunity to monetize these departments they've let stagnate for decades. There are more workers assigned to the grocery aisles, produce, deli and Bakery at the "slow" SuperTarget than in the entire Amazon Fresh building now. I noticed they've gone back to issuing aprons to the workers in the grocery department, which makes me suspect they stopped the classic Target practice of treating foods like hardlines and having the same person who stocks electronics and furniture also handle produce. And all of their products were arguably fresher than "Fresh"...

Clearly someone at Target must be looking at the industry, at their traffic and volume versus Walmart, and recognizing they have a tremendous opportunity to gain volume and market share in buildings they already own and operate. They have not hesitated to remove other product categories over the years from their stores or aggressively prune SKU counts to the minimum of what sells best, so I can't help but wonder if they're finally trying to figure out how to make this food business work after almost 30 years of tinkering with it... I think they have a lot of those small format locations where they're missing the mark and need to remove a lot of the clothing, electronics, and other stuff that just gets clearanced out or junked - and many were supermarkets before. I can't help but wonder if they're trying to figure out how to make more of a Target grocery store for the smaller formats vs continue to limp along with those problematic, underwhelming little stores they're probably stuck with for a decade or more due to leases. Their drive up service is quietly being engineered for improved efficiency with order batching and customer geolocation with their app, couple that with a decent fresh food program and the sky's the limit for them.

[veteran+]

Man oh man, I sure hope so!

But I am sure I will not be seeing any SuperTargets in my area

[marketreportblog]

Although I haven't been to an Amazon Fresh lately, looking at pictures online it seems like several on the east coast are permanently closing the service meat and seafood counters:
Warrington, PA
Oceanside, NY
Broomall, PA ("the seafood section closed up")

People are also complaining about the empty shelves at the east coast locations. How much longer will Amazon keep these stores open? Would there be a benefit to Amazon to running the stores at a loss? If these stores were owned by anyone other than Amazon and we were seeing empty shelves, closed service departments, and specialty features like salad bars and hot food bars empty, it would be pretty clear that the stores' closures are impending. But it's possible Amazon has a bigger endgame here beyond just running a few supermarkets. That said, the fact that there haven't been any new openings lately although there are any number of stores fully built out (along with the fact that they seem to be giving up on some of those locations) suggests that the end is near.