Amazon Halts All New Amazon Fresh Just Walk Out Stores

[bryceleinan]

Amazon just won't give up on groceries....according to this Bloomberg article, Amazon is going to resume opening Fresh locations. Link

And another about a store in North Jersey where permits have been updated to reconfigure the checkout areas.
Link

That is great. I hope they will get Roseville and Citrus Heights opened up soon. Their new format is not good but if they are going to open they may as well just get moving and open, no use sitting on empty buildings any longer if they want to be open. What are a few more no volume grocery stores to sit there and let items expire out in?

Also would like for them to find a location in Reno. There is a shopping center in Reno with a vacant Good Guys and Bed Bath and Beyond, actually the Good Guys was supposed to be a Wild Oats relocation but then the Whole Foods merger happened and then the FTC tried to make Whole Foods divest the building but nobody ever expressed interest in it so it has just stayed vacant ever since Good Guys closed.

I’m hoping to see both an Amazon Fresh and a Micro Center or Gigaparts in Reno, and that would be the plaza for both of them.

[veteran+]

Just got my "Grand Reopening" mailer for Pasadena. Great coupons: 25% off of $50 for weeks of 11/11, 11/18, and 11/26, and 20% off for 12/2. Not a bad deal, especially when stacked with the 5% rebate for the Amazon Prime VISA.

You may want to wait until you see their new prices before you say that... pricing in IL was terrible. So high. Way higher than Jewel which is actually rather reasonably priced. Which means way way higher than lower cost chains.

The other problem they're going to have a heck of a time with is weaning people off those giant coupons. At this point in time the only customers shopping all have some kind of coupon. It's having the opposite effect on what they want which is consistent traffic. For a short while the coupons said new customers only which probably just moved the customers to the one staffed register increasing their costs and paying cash or with a pay type not linked to an Amazon account.

Failure #1 is all purchasing customers are bringing a coupon.
Failure #2 is that now "regular" purchasing customers won't shop without a coupon.
Failure #3 is that the customers generally limit their spend to the amount of the coupon to maximize their savings, so if it's say a $20 off $50 then they're going to spend as close to $50 as possible and no more. They have adjusted some coupons to % off to compensate but I'm not sure that's working. The $ off are the most desirable and recirculated online.
Failure #4 is that they've obviously marked up the entire store to compensate for the coupon.
Failure #5 is that anyone who isn't somehow in the path of marketing coupons who just walks in to look at the store will walk right back out empty handed because the prices are sky high.
Failure #6 is that I really wonder if the marked up shelf price is intended to cover up the cost of "free" delivery or pickup services... Since the coupon is for bringing in store purchase only out of the stratosphere. If that is the case then they need to figure out the pricing and labor model... Which I suppose is a nut they've been unable to crack which is why they basically have killed their incredible delivery volumes they used to do AND aren't getting any traction on in store sales.

What a disaster.

EXACTLY!

Fresh & Easy part deux!

They were stuck in that and could not get out. Everytime they did volume dropped and customers got visibly angry.

[storewanderer]

EXACTLY!

Fresh & Easy part deux!

They were stuck in that and could not get out. Everytime they did volume dropped and customers got visibly angry.

F&E caved to the angry patrons and brought coupons back.

Amazon doesn't cave. They just let the angry visitors go pound sand.

These new coupons aren't quite the same as the old ones. The old ones were like $10 off $25 etc. Now we have this 25% off $50 thing. Management has changed and with it so has the coupon strategy. But at the end of the day it is the same old unsustainable strategy.

[ClownLoach]

EXACTLY!

Fresh & Easy part deux!

They were stuck in that and could not get out. Everytime they did volume dropped and customers got visibly angry.

F&E caved to the angry patrons and brought coupons back.

Amazon doesn't cave. They just let the angry visitors go pound sand.

These new coupons aren't quite the same as the old ones. The old ones were like $10 off $25 etc. Now we have this 25% off $50 thing. Management has changed and with it so has the coupon strategy. But at the end of the day it is the same old unsustainable strategy.

The point is the management hasn't changed. It's the same Tesco people Amazon recruited. Same clowns who ran F&E into the ground are repeating the same mistakes. Amazon needs to figure out the pricing situation. If the prices online for delivery have to be more expensive to cover the cost, then that's what it has to be. The mistake they're making is assuming that the in store customer is also the delivery customer. I don't believe they're the same at all at this juncture, but they're effectively linking them together with the coupon strategy. Nobody is calling for Instacart to get rid of their markup on Costco items that covers delivery costs for example. Amazon needs to try lowering the in store shelf price to compete with the brick and mortar grocers instead of using the coupon as a device to scrub the markup. They're just trying too hard to make the prices "look" the same between in store and online by adding the coupon gimmick. It's not working. They could easily be able to hang giant signs screaming 30,000+ Massive Price Cuts on the store and get a lot of attention, and they wouldn't lose a penny of the online sales. Besides, if the online customer decides to go to the store instead because it's cheaper, isn't that what they were trying to accomplish anyway (get them to shop both avenues)? Is it that hard?

[ClownLoach]

I believe Amazon has finished removing the "Super Fresh Supermarket - Amazon Fresh stores" ads from all of the delivery vans in SoCal. About half of the vans had that phrase and cartoon bananas on them. They now have some phrase I found forgettable (like I literally forgot it) in an attempt to promote their cost saving initiative "Amazon Day Delivery" where you select a day of the week for all your Amazon deliveries to arrive and then they consolidate them into a single delivery. If they're really going to push forward on these Fresh stores then I would think they'd be increasing the ads instead of eliminating them. At this point if they closed all the stores tonight they don't have to change out any more vans serving as rolling billboards for them.

On that same note, my area had been 100% swapped out with the new Rivian electric delivery vehicles, but I haven't seen one now for at least a couple months. I wonder if they're not working out...

[ClownLoach]

Things have been quiet, but I decided to stop into my local Fresh store today and I have to wonder if the end is finally near.

The in-stocks have seriously deteriorated and I would describe it as 40% out of stock. Furthermore, many sections are "faced out" in illogical manner with items from two or three sections away just to fill holes, creating weirdness like random facings of Kraft macaroni and cheese boxes scattered all thru an aisle.

But what is more alarming and makes me wonder if something urgent is pending is the status of DSD items. The bread aisle is in a shambles with very few "normal" breads left, just some odd raisin breads and other exotics. Probably 80% empty. Ice cream including Dreyers and Tillamook the entire case is just one or two flavors all faced out. Dairy and eggs were stocked but they are all Amazon branded so I don't think they are vendor DSD. Only DSD that looked decent was the chip aisle, but it's the Super Bowl this weekend and everyone in town is buried in Frito-Lay merchandise. Aside from the usual aisle there was only one endcap and no other special displays which indicates they could have not received anything this week or so and just broken down all the Super Bowl displayers because they were emptying out. The deli case is almost empty with only a couple of meats and cheeses from D&W.

The missing direct store delivery items make me wonder if Amazon has cut off orders... It would make sense to pull the plug after the busy Super Bowl weekend...

Something is definitely more "off" than usual.

[marketreportblog]

Things have been quiet, but I decided to stop into my local Fresh store today and I have to wonder if the end is finally near.

I have no doubt you’re right, and yet, Amazon still says they’re not going anywhere.

There’s very little substance to their claims, and I think it’s very likely that after that “test” period they decide what truly “resonates with customers,” to use their words, is to sell the stores or flip them to Whole Foods.

[ClownLoach]

Things have been quiet, but I decided to stop into my local Fresh store today and I have to wonder if the end is finally near.

I have no doubt you’re right, and yet, Amazon still says they’re not going anywhere.

There’s very little substance to their claims, and I think it’s very likely that after that “test” period they decide what truly “resonates with customers,” to use their words, is to sell the stores or flip them to Whole Foods.

About this time last year Amazon impounded nearly a billion dollars as a hit against earnings, and the funds were explicitly for the terminations of leases and closing costs for retail stores. The costs to close stores like Bookstores and 4-Star would be minimal as they were typical mall tenants which do not cost a lot to sever, certainly not any amount of significance that would require announcement on their financials. The cost had to be for Fresh.

So they do have to do something. Either they have to book the billion dollars back into the financials as earnings, or they need to spend them as they originally described. They can't just leave money sitting around. And as long as the funds are reserved, they can close them down without hurting the current quarter earnings.

Hence they speak out of one side of their mouth that they're committed to running them, but the other side is clear as they literally took a massive hit to their earnings just to set aside the estimated closing costs. Between fluff PR and sworn SEC filings, I'm more inclined to believe the sworn SEC filings are in line with their plans.

[storewanderer]

Things have been quiet, but I decided to stop into my local Fresh store today and I have to wonder if the end is finally near.

The in-stocks have seriously deteriorated and I would describe it as 40% out of stock. Furthermore, many sections are "faced out" in illogical manner with items from two or three sections away just to fill holes, creating weirdness like random facings of Kraft macaroni and cheese boxes scattered all thru an aisle.

But what is more alarming and makes me wonder if something urgent is pending is the status of DSD items. The bread aisle is in a shambles with very few "normal" breads left, just some odd raisin breads and other exotics. Probably 80% empty. Ice cream including Dreyers and Tillamook the entire case is just one or two flavors all faced out. Dairy and eggs were stocked but they are all Amazon branded so I don't think they are vendor DSD. Only DSD that looked decent was the chip aisle, but it's the Super Bowl this weekend and everyone in town is buried in Frito-Lay merchandise. Aside from the usual aisle there was only one endcap and no other special displays which indicates they could have not received anything this week or so and just broken down all the Super Bowl displayers because they were emptying out. The deli case is almost empty with only a couple of meats and cheeses from D&W.

The missing direct store delivery items make me wonder if Amazon has cut off orders... It would make sense to pull the plug after the busy Super Bowl weekend...

Something is definitely more "off" than usual.

How can they fulfill home delivery orders from a store like that?

How did produce look?

Tillamook Ice Cream isn't typically DSD though, it usually comes through with other frozen distribution. They could have a different arrangement. Probably the DSD Dreyers didn't refill the flavors people wanted so Tillamook got substituted and now there they are missing all of the popular flavors period.

How did staffing look? I wonder if they have an issue receiving product. Or is the store about to get the major remodel/reset (could they possibly be throwing more money at this)?

[ClownLoach]

Things have been quiet, but I decided to stop into my local Fresh store today and I have to wonder if the end is finally near.

The in-stocks have seriously deteriorated and I would describe it as 40% out of stock. Furthermore, many sections are "faced out" in illogical manner with items from two or three sections away just to fill holes, creating weirdness like random facings of Kraft macaroni and cheese boxes scattered all thru an aisle.

But what is more alarming and makes me wonder if something urgent is pending is the status of DSD items. The bread aisle is in a shambles with very few "normal" breads left, just some odd raisin breads and other exotics. Probably 80% empty. Ice cream including Dreyers and Tillamook the entire case is just one or two flavors all faced out. Dairy and eggs were stocked but they are all Amazon branded so I don't think they are vendor DSD. Only DSD that looked decent was the chip aisle, but it's the Super Bowl this weekend and everyone in town is buried in Frito-Lay merchandise. Aside from the usual aisle there was only one endcap and no other special displays which indicates they could have not received anything this week or so and just broken down all the Super Bowl displayers because they were emptying out. The deli case is almost empty with only a couple of meats and cheeses from D&W.

The missing direct store delivery items make me wonder if Amazon has cut off orders... It would make sense to pull the plug after the busy Super Bowl weekend...

Something is definitely more "off" than usual.

How can they fulfill home delivery orders from a store like that?

How did produce look?

Tillamook Ice Cream isn't typically DSD though, it usually comes through with other frozen distribution. They could have a different arrangement. Probably the DSD Dreyers didn't refill the flavors people wanted so Tillamook got substituted and now there they are missing all of the popular flavors period.

How did staffing look? I wonder if they have an issue receiving product. Or is the store about to get the major remodel/reset (could they possibly be throwing more money at this)?

They had completely reset the store within the last couple of months already. The aisles now have the stupid computer screens for category signs. Store is running skeleton crew as always. The only traffic is to the Amazon Return desk.

It is apparent now that aside from the aisle reset that adds more SKUs especially in GM, the "remodeled" Amazon stores are really only getting new wall decor, walling off the closed meat counter and putting a new cooler in front of it, adding a useless Krispy Kreme kiosk serving trucked in stale doughnuts from a nearby factory store, and adding a couple of self checkout lanes.

This is the Murrieta location that is a former Rite Aid, so smaller format than the chain standard. It was a test for that smaller size and it just does not work.

Produce was also very light and spread out, single broccoli spread across 4 shelves, maybe a dozen of each color of peppers, and lots of green labeled Fresh bags of apples spread out to take up space.

Something was more "off" than usual.

Also I figured out what was happening with the mothballed Corona store.

They are building an EOS fitness next to it, so that was the source of all the sudden arrival of construction equipment. In addition, there is a large red new For Lease sign that was installed facing the freeway behind the building.

I think Corona was one of the first to complete construction and be mothballed. Unlike many other locations this was a completely new shopping center. Since they never arrived the center tenant plan has pivoted, and what was probably going to be a drugstore site along with the rest of the strip of stores on the Southeast corner has been changed to a hotel which is under construction (I think it's Hampton Inn). So they basically killed this center which was promised as walking distance grocery shopping for an entire master planned home development. Not a ton of sympathy here because there's a very nice Stater Bros across the street that appears to be 10 years old or less, although it's a steep uphill walk. I don't know about you, but I would be very unhappy if I bought a home with plans for retail in the middle and it became a hotel. I could see the retail falling through and becoming more homes, but a hotel is different and can bring problems if not well managed.