Amazon Fresh, take 2

[ClownLoach]

I have no idea what Amazon is trying to do with groceries anymore....I received this in the mail the other day and it leaves me puzzled. So the groceries are gathered at a Weis store by Weis employees, then delivered by an Amazon contractor? Why? Why would Amazon want to divert business away from its own 'Fresh' business? Weis already partners with Instacart and Shipt, and has a pickup option. Are any other grocery chains doing this?

My guess is, similar how they appear to be using Nash Finish to supply the Chicago Amazon Fresh Stores (which is sure to finish them off quick), they are using Weis to supply the Amazon Fresh Stores in your area now...

I wonder if this may be their new plan for the Fresh Stores. Try to partner with some regional grocer to supply the stores and give them the Amazon back end to do online sales through...

This will make the uneven operation even more uneven.

This is a very old Amazon program, not a new one, and frankly a program that I'm surprised is still around. The Amazon flex delivery drivers get more work because they have more stores to service besides the moribund Fresh and Whole Foods locations. The stores pick their own goods and pack. It has nothing to do with supply. It was a program called Prime Now that also was a restaurant delivery service but that side died out along with being a separate app. They also had a very limited selection of Amazon goods that were available in a 2 hour window. Basically every part of Prime Now is now dead except for the only part that was popular and that was local delivery for these grocery stores. It's not representative of anything to do with supplying Fresh stores, not connected in any way, it's merely a piece of software that could be turned off any day but obviously it makes some kind of profit for all involved. Everyone is making a much bigger deal of this than it really is, Weis isn't stocking Fresh and neither is Bristol Farms or any of the other chains that participate.

Furthering this, Amazon delivers for Cardenas too. Further invalidating the concept that these other stores are stocking for Amazon.

[Alpha8472]

Love your nicknames for wholesalers. Nash Finish and Flaming. Gotta come up with a good nickname for Supervalu.

I like to call the company SubparValu.

[marketreportblog]

Three built but unopened Amazon Fresh stores in CT and MA have been sold to Big Y: https://www.newstimes.com/news/article/ ... 623935.php

Edit to add another planned CT store isn’t happening and will instead be an ALDI: https://www.facebook.com/share/yAYj2ZTK ... tid=WC7FNe

[storewanderer]

Three built but unopened Amazon Fresh stores in CT and MA have been sold to Big Y: https://www.newstimes.com/news/article/ ... 623935.php

Edit to add another planned CT store isn’t happening and will instead be an ALDI: https://www.facebook.com/share/yAYj2ZTK ... tid=WC7FNe

Finally- now we have evidence they are trying to quit sitting on empty sites and give them to parties who want to do something with them.

Hopefully some idle sites out west can also get released.

As much as I wanted to see how they'd do in Sacramento... it is pretty obvious... so best to just release the sites to other operators.

[retailfanmitchell019]

Finally- now we have evidence they are trying to quit sitting on empty sites and give them to parties who want to do something with them.

Hopefully some idle sites out west can also get released.

As much as I wanted to see how they'd do in Sacramento... it is pretty obvious... so best to just release the sites to other operators.

I’d like to see the mothballed Poway store go back to Albertsons. That building had been through 5 names: Lucky, Albertsons, Haggen, Atlas Market, Amazon Fresh.

[storewanderer]

Finally- now we have evidence they are trying to quit sitting on empty sites and give them to parties who want to do something with them.

Hopefully some idle sites out west can also get released.

As much as I wanted to see how they'd do in Sacramento... it is pretty obvious... so best to just release the sites to other operators.

I’d like to see the mothballed Poway store go back to Albertsons. That building had been through 5 names: Lucky, Albertsons, Haggen, Atlas Market, Amazon Fresh.

You bring up a sore point with Poway. Atlas Market was a really strong effort. It was lost due to the arrogance of Amazon Fresh combined with a landlord who turned their back on an independent group who put a LOT of money into the space to get Atlas Market into what it was, instead favoring Amazon who promptly demolished all that Atlas put into the store. I am guessing Atlas ran under short leases due to the risks of business failure and how long term lease liabilities can push you into bankruptcy vs. just being able to "walk" from the failing business. As far as I'm concerned that landlord can enjoy a vacant building for a long time. I don't see Albertsons taking that site back; it was a smaller store that didn't do overly great volume anyway.

[ClownLoach]

Three built but unopened Amazon Fresh stores in CT and MA have been sold to Big Y: https://www.newstimes.com/news/article/ ... 623935.php

Edit to add another planned CT store isn’t happening and will instead be an ALDI: https://www.facebook.com/share/yAYj2ZTK ... tid=WC7FNe

Finally- now we have evidence they are trying to quit sitting on empty sites and give them to parties who want to do something with them.

Hopefully some idle sites out west can also get released.

As much as I wanted to see how they'd do in Sacramento... it is pretty obvious... so best to just release the sites to other operators.

There is a new construction fence and equipment landed at the Corona store that was one of the first to be mothballed, indicating something is finally happening there. I will never understand why this center was built considering the vacant Toys R Us, Babies R Us, Staples, Sports Authority and others directly across the highway. The other half of the center that hadn't been completed turned into a new Hampton Inn which is under construction, but the fencing and equipment I just saw is clearly for the Fresh site not the hotel (the dock appears to be fenced in). Next time I'm up that way I'll do some snooping and see who took the site... It would make a lot of sense however if they made it a Whole Foods even though I think it would be smaller than their ideal size.

[brendenmoney]

It wouldn't be surprising if Amazon is waiting for a decision on the Kroger/Albertsons merger to determine whether they really want to continue investing in Fresh, as competing with a newly expanded Kroger is the only reason at this point I could see as a good reason for Amazon to continue investing in it's Fresh stores, and even that, Amazon will still more likely be successful against them if they dropped Fresh and focused on Whole Foods and online grocery delivery regardless of the merger decision. If the merger falls through, I wouldn't be shocked if Amazon announces the closure/sale (and maybe a select few converted to Whole Foods) of all remaining Fresh stores within a couple days of the blocking of the merger.

Some SoCal Fresh stores, such as Corona, Whittier, La Habra, and Mission Viejo would be excellent locations for Whole Foods to take over, despite being on the smaller end in terms of store size.

[ClownLoach]

It wouldn't be surprising if Amazon is waiting for a decision on the Kroger/Albertsons merger to determine whether they really want to continue investing in Fresh, as competing with a newly expanded Kroger is the only reason at this point I could see as a good reason for Amazon to continue investing in it's Fresh stores, and even that, Amazon will still more likely be successful against them if they dropped Fresh and focused on Whole Foods and online grocery delivery regardless of the merger decision. If the merger falls through, I wouldn't be shocked if Amazon announces the closure/sale (and maybe a select few converted to Whole Foods) of all remaining Fresh stores within a couple days of the blocking of the merger.

Some SoCal Fresh stores, such as Corona, Whittier, La Habra, and Mission Viejo would be excellent locations for Whole Foods to take over, despite being on the smaller end in terms of store size.

I was thinking something similar, that Amazon is waiting to see whatever happens with the merger. However, they performed a cash impairment action of nearly a billion dollars a year ago which would cover the costs of liquidating and closing all of the Fresh stores. So that money is sitting in an account and already negatively impacted their earnings. The mystery is, what exactly was the plan for that money? Although Amazon had a lot of sites lined up, they were pushing their landlords to build the boxes and then started pushing lawsuits claiming defects, unfinished work etc. that would normally be put on a "punch list" so that they could try to avoid paying full lease severance.

I would imagine that Amazon has three incentives here: first, if they've been using part of that billion dollar slush fund to cover losses on these stores then at some point they have to stop and close the rest or risk having to take further losses against future earnings. Second, if they were to somehow magically fix Fresh to the point of stemming the bleeding and at least breaking even then they could reabsorb some of that billion dollar fund as a credit to earnings. Third, I still have to wonder if they have something lined up with private equity folks to potentially offload Fresh and WFM together... And possibly to the next potential buyer of Albertsons (or Albertsons itself?) once Kroger gets blocked by the courts.

And for those who have commented about the size of Amazon and how this isn't important, you might recall that after the cash impairment they actually had to take out a short term loan for liquidity purposes... Yes, this Gigantic corporation that is worth so much on paper found itself short on cash.

[pseudo3d]

It wouldn't be surprising if Amazon is waiting for a decision on the Kroger/Albertsons merger to determine whether they really want to continue investing in Fresh, as competing with a newly expanded Kroger is the only reason at this point I could see as a good reason for Amazon to continue investing in it's Fresh stores, and even that, Amazon will still more likely be successful against them if they dropped Fresh and focused on Whole Foods and online grocery delivery regardless of the merger decision. If the merger falls through, I wouldn't be shocked if Amazon announces the closure/sale (and maybe a select few converted to Whole Foods) of all remaining Fresh stores within a couple days of the blocking of the merger.

Some SoCal Fresh stores, such as Corona, Whittier, La Habra, and Mission Viejo would be excellent locations for Whole Foods to take over, despite being on the smaller end in terms of store size.

Kroger/Albertsons seems more predicated on the Amazon Fresh expansion (remember, this was supposed to be some sort of game-changer, much like how Amazon Go was supposed to open hundreds of stores) than the other way around.

Third, I still have to wonder if they have something lined up with private equity folks to potentially offload Fresh and WFM together... And possibly to the next potential buyer of Albertsons (or Albertsons itself?) once Kroger gets blocked by the courts.

I have considered the possibility of Amazon either buying or investing in Albertsons after the merger falls through.

The problem would be how much of Amazon rubs off on Albertsons. If it's just to keep investors happy, give some bump to the Albertsons return counters, and a growth vehicle for the company, it's fine, but Amazon destroyed Whole Foods with its own policies and that could be bad for Albertsons when it comes to the fresh food departments. Or it could help...either way, there needs to be some sort of corporate separation due to the unions in Albertsons.

The big question is Whole Foods Market and its integration into Albertsons. In a way their business is obsolete as so much has changed since the 1990s when they were growing, but their wholly unique brand, their international expansion...it seems like it would be a poor fit; the only way I could see it working is if Albertsons (or whoever) does a massive purge/conversion of stores to bring it back to its original intention with only a few stores per metro area.