Re: Smart & Final Torrance closed - Re-Opening as Amazon Fresh

[J-Man]

There have been rumors for almost a year (there are articles dating back to January of last year) that they're planning to go into the former Orchard Supply Hardware in Pasadena, but so far nothing has come of it.

[ClownLoach]

It feels like they have more of these built, sitting and mothballed than anything else. I saw a brand new store fully constructed in Amazon's backyard near Federal Way, WA with paper in the windows, no sign, and no forward progress at all. I saw a site somewhere near Vancouver or Camas as well as south of Portland that also both appeared to be Amazon Fresh stores under construction. You can already identify the store even if they didn't sign it because of the distinctive green stripes over the entrance. They bought out an international store that was doing fine in an ex Haggen/Albertsons in Poway to enter San Diego Market but nothing is happening since. They bought out OfficeMax in Mission Viejo and at one point had 24 hour construction going (which isn't even legal there - the city rules are 7am to dusk and no work Sundays) but now it sits idle. Same for Huntington Beach where they bid for an existing Big Lots and all the stores next door - it looks really bizarre. And yet supposedly they're taking part of the dead Aliso Viejo Lowes, a Laguna Hills Big Lots that was a Hughes many, many years ago, and other locations. Not only that but now they've moved away from the clunky computerized Dash Cart and they're moving forward with the full Just Walk Out technology (which still must be very expensive to install and creates inconsistencies in the chain unless they retrofit the existing stores to this new tech). Part of Just Walk Out is a series of security gates at entrance and exit where Amazon asks you to register your handprint with a contactless digital scanner. Not so sure that everyone is going to feel comfortable having their biometrics stored in a Amazon database just to enter the grocery store...

I really believed in this at first, but it seems that both the heavy delivery traffic as well as the in store traffic have died off. Clearly they aren't making money right out of the gate any longer - otherwise they would be accelerating openings instead of metering them. Again it is exceptionally difficult to change entrenched shopping habits. That 3x a week Ralphs shopper might have tried Amazon Fresh delivery in the height of the pandemic but all it would take is one bad head of lettuce and suddenly nope, back to the routine and back to Ralphs. When it comes to food it is clear that the customer is very unforgiving if you're new in the market, and if anything goes wrong you do not get a second chance. Trust is built over years, not days weeks or months in the food business.

[CalItalian]

It feels like they have more of these built, sitting and mothballed than anything else. I saw a brand new store fully constructed in Amazon's backyard near Federal Way, WA with paper in the windows, no sign, and no forward progress at all. I saw a site somewhere near Vancouver or Camas as well as south of Portland that also both appeared to be Amazon Fresh stores under construction. You can already identify the store even if they didn't sign it because of the distinctive green stripes over the entrance. They bought out an international store that was doing fine in an ex Haggen/Albertsons in Poway to enter San Diego Market but nothing is happening since. They bought out OfficeMax in Mission Viejo and at one point had 24 hour construction going (which isn't even legal there - the city rules are 7am to dusk and no work Sundays) but now it sits idle. Same for Huntington Beach where they bid for an existing Big Lots and all the stores next door - it looks really bizarre. And yet supposedly they're taking part of the dead Aliso Viejo Lowes, a Laguna Hills Big Lots that was a Hughes many, many years ago, and other locations. Not only that but now they've moved away from the clunky computerized Dash Cart and they're moving forward with the full Just Walk Out technology (which still must be very expensive to install and creates inconsistencies in the chain unless they retrofit the existing stores to this new tech). Part of Just Walk Out is a series of security gates at entrance and exit where Amazon asks you to register your handprint with a contactless digital scanner. Not so sure that everyone is going to feel comfortable having their biometrics stored in a Amazon database just to enter the grocery store...

I really believed in this at first, but it seems that both the heavy delivery traffic as well as the in store traffic have died off. Clearly they aren't making money right out of the gate any longer - otherwise they would be accelerating openings instead of metering them. Again it is exceptionally difficult to change entrenched shopping habits. That 3x a week Ralphs shopper might have tried Amazon Fresh delivery in the height of the pandemic but all it would take is one bad head of lettuce and suddenly nope, back to the routine and back to Ralphs. When it comes to food it is clear that the customer is very unforgiving if you're new in the market, and if anything goes wrong you do not get a second chance. Trust is built over years, not days weeks or months in the food business.

The new Amazon Fresh in Murrieta has been completed since September. Even the city congratulated them on Twitter back then. But it has yet to open. It was supposed to open in late fall (before Thanksgiving, actually). All construction activity ended months ago.
https://www.google.com/maps/uv?pb=!1s0x ... x96BAg3EAg

[ClownLoach]

It feels like they have more of these built, sitting and mothballed than anything else. I saw a brand new store fully constructed in Amazon's backyard near Federal Way, WA with paper in the windows, no sign, and no forward progress at all. I saw a site somewhere near Vancouver or Camas as well as south of Portland that also both appeared to be Amazon Fresh stores under construction. You can already identify the store even if they didn't sign it because of the distinctive green stripes over the entrance. They bought out an international store that was doing fine in an ex Haggen/Albertsons in Poway to enter San Diego Market but nothing is happening since. They bought out OfficeMax in Mission Viejo and at one point had 24 hour construction going (which isn't even legal there - the city rules are 7am to dusk and no work Sundays) but now it sits idle. Same for Huntington Beach where they bid for an existing Big Lots and all the stores next door - it looks really bizarre. And yet supposedly they're taking part of the dead Aliso Viejo Lowes, a Laguna Hills Big Lots that was a Hughes many, many years ago, and other locations. Not only that but now they've moved away from the clunky computerized Dash Cart and they're moving forward with the full Just Walk Out technology (which still must be very expensive to install and creates inconsistencies in the chain unless they retrofit the existing stores to this new tech). Part of Just Walk Out is a series of security gates at entrance and exit where Amazon asks you to register your handprint with a contactless digital scanner. Not so sure that everyone is going to feel comfortable having their biometrics stored in a Amazon database just to enter the grocery store...

I really believed in this at first, but it seems that both the heavy delivery traffic as well as the in store traffic have died off. Clearly they aren't making money right out of the gate any longer - otherwise they would be accelerating openings instead of metering them. Again it is exceptionally difficult to change entrenched shopping habits. That 3x a week Ralphs shopper might have tried Amazon Fresh delivery in the height of the pandemic but all it would take is one bad head of lettuce and suddenly nope, back to the routine and back to Ralphs. When it comes to food it is clear that the customer is very unforgiving if you're new in the market, and if anything goes wrong you do not get a second chance. Trust is built over years, not days weeks or months in the food business.

The new Amazon Fresh in Murrieta has been completed since September. Even the city congratulated them on Twitter back then. But it has yet to open. It was supposed to open in late fall (before Thanksgiving, actually). All construction activity ended months ago.
https://www.google.com/maps/uv?pb=!1s0x ... x96BAg3EAg

Murrieta is still not open. What makes this one different is that it is fully signed. Even has cart corrals and curbside pickup spots. But it has not opened and does not appear to be fulfilling orders "dark" as we have seen in the past. The other mothballed stores don't have signs but are clearly Amazon Fresh due to color scheme, door layout and the "stripes" over the entrance doors. Huntington Beach and Mission Viejo are also mothballed. Makes me think that they are still hemorrhaging cash to the point where it is cheaper to pay rent on a closed building instead of opened. That is not a good sign...

[luckysaver]

The new SoCal Fresh stores that were mentioned earlier (Huntington, Murrieta, La Verne) are dark because they are in the process of hiring new employees and training them, and even if they are fully stocked inside, it is used for Prime grocery fulfillment. Apparently they prefer to hire a majority of the employees with little or no grocery experience and the management teams were transferred over from the fulfillment warehouses. Remember that FRESH stores are independent of Whole Foods, tough they share some similarities (prepared foods, produce items, 365 brand products). They will open to the public when the store has enough merchandise and all the new employees are fully trained. Most of the store employees (the ones that wear the black shirts and don't work in kitchen or meat seafood) are cross-trained to stock aisles, cashier, customer service, and Prime fulfillment. I been to SoCal stores at times when half of the employees on duty are pushing large carts in each aisle with 10-12 Prime bags on top. Some stores have/will have all the Prime-only fulfillment mini- warehouse area in the back of the store (the new Just-Walk-Out location in La Habra has it behind the public restrooms) so that they don't have to pull from the main sales floor. I used to work in a Prime grocery warehouse in Irvine CA and the merchandise is exactly the same (when I started there my warehouse didn't carry a lot of A-Fresh, Happy Belly or 365 products until recently).

A similar dark setup is one of the Whole Foods in the NYC area (I think in Brooklyn) - Amazon converted it from a conventional store to a Prime-only fulfillment warehouse (of the Whole Foods format) in late 2020 and customers are not permitted inside the building. They may be planning to open a few more of these.

In case you didn't know, much of the SoCal region Fresh's produce selection is exactly the same as Whole Foods except for the Fresh-branded packaged produce. In the SoCal region, Fresh uses with Whole Foods' distribution center in Vernon CA. Likewise, produce at Prime fulfillment warehouses also come from Whole Foods' Vernon DC.

luckysaver

[CalItalian]

Amazon Fresh is hiring 1,500 for 6 new ‘Just Walk Out’ stores in Southern California.

The grocery stores in Huntington Beach, Mission Viejo, Westlake Village, La Verne, Moorpark and Murrieta will all use "Just Walk Out" technology.

No date for store openings.

https://www.ocregister.com/2022/02/07/a ... alifornia/

[storewanderer]

Amazon Fresh is hiring 1,500 for 6 new ‘Just Walk Out’ stores in Southern California.

The grocery stores in Huntington Beach, Mission Viejo, Westlake Village, La Verne, Moorpark and Murrieta will all use "Just Walk Out" technology.

No date for store openings.

https://www.ocregister.com/2022/02/07/a ... alifornia/

Work is continuing in Roseville but it is sure taking a long time. No idea when it is going to open. I look forward to visiting it about 4 weeks after grand opening.

[ClownLoach]

The new SoCal Fresh stores that were mentioned earlier (Huntington, Murrieta, La Verne) are dark because they are in the process of hiring new employees and training them, and even if they are fully stocked inside, it is used for Prime grocery fulfillment. Apparently they prefer to hire a majority of the employees with little or no grocery experience and the management teams were transferred over from the fulfillment warehouses. Remember that FRESH stores are independent of Whole Foods, tough they share some similarities (prepared foods, produce items, 365 brand products). They will open to the public when the store has enough merchandise and all the new employees are fully trained. Most of the store employees (the ones that wear the black shirts and don't work in kitchen or meat seafood) are cross-trained to stock aisles, cashier, customer service, and Prime fulfillment. I been to SoCal stores at times when half of the employees on duty are pushing large carts in each aisle with 10-12 Prime bags on top. Some stores have/will have all the Prime-only fulfillment mini- warehouse area in the back of the store (the new Just-Walk-Out location in La Habra has it behind the public restrooms) so that they don't have to pull from the main sales floor. I used to work in a Prime grocery warehouse in Irvine CA and the merchandise is exactly the same (when I started there my warehouse didn't carry a lot of A-Fresh, Happy Belly or 365 products until recently).

A similar dark setup is one of the Whole Foods in the NYC area (I think in Brooklyn) - Amazon converted it from a conventional store to a Prime-only fulfillment warehouse (of the Whole Foods format) in late 2020 and customers are not permitted inside the building. They may be planning to open a few more of these.

In case you didn't know, much of the SoCal region Fresh's produce selection is exactly the same as Whole Foods except for the Fresh-branded packaged produce. In the SoCal region, Fresh uses with Whole Foods' distribution center in Vernon CA. Likewise, produce at Prime fulfillment warehouses also come from Whole Foods' Vernon DC.

luckysaver

They are no longer doing the dark store for months. Mission Viejo was rushed through construction including what was illegal 24 hour work (the city only allows 7am to dusk, Monday - Saturday) only to be halted and the store sat for months with visibility into empty store fixtures.

I believe eliminating the months of dark store operations is part of the problem with the poor conditions as they open up new stores and it becomes much more difficult to ramp both sides of the business at once. I remember when Irvine opened and I met Managers and Employees for Long Beach there who were doing on the job training. But now they're just staffing and opening because they are not doing anything close to the delivery volume that they did in 2020 so they need every dollar they can bring in. I spoke to a Manager shortly after Long Beach opened and they said that the entire day's sales budget was in before the doors opened to the public as they stood in front of the fulfillment area completely jam packed with bagged orders overflowing into the register area. Now you can go there in the morning and look into the same space and it's a handful of orders, their delivery business must be down 90% from peak pandemic volume. They made some serious mistakes that caused them to halt store openings and hopefully this next wave is handled better.

The biggest problem was the fact that they were establishing a good delivery business prior to opening before but then they gutted the value of it by raising prices after opening and issuing drastic $15 off $35 coupons that can only be used for in store shops - they basically eliminated the promise of same price in store or with free delivery for Prime members. It's not free if your order costs $15 more than it would in the store.

According to the article yesterday they just started hiring now for the 6 new stores. That just really means they're going to go out and start poaching Target managers and employees again. They are very good at raiding Target (probably because they recruited several Regional HR leaders from Target who know who to call!).

When you think about it, 250 people per store is a massive number even though they will have more part time than a typical grocer. A Target store is quoted as having between 150-200 employees by UMass. Walmart self reports having 2.2 million store associates in 10,500 stores worldwide which averages 209 per store. The average Trader Joe's has 94 employees. Clearly 250 is not a sustainable number for such a low volume operation as these Amazon Fresh stores - the payroll bleed with that headcount is incredible. Amazon is quoting $18 minimum hourly rate in California now. If those 250 employees are working an average of 20 hours a week that is a $90K weekly payroll per store. Kroger, who brings in $31B a quarter in sales, has a SG&A (which is mostly payroll) of 16%. If these stores were operating with the efficiency of Kroger - which we know they aren't since e-commerce order picking is just not nearly as efficient as regular cashiering of orders - they would need to have at least $560K in sales per week per store to justify that payroll headcount at Kroger's labor percentage. There is no way in hell that any of them are doing $560K per week - that would put each of these Amazon Fresh stores at doing $29M per year and we know that isn't happening when for comparison the average Target does $49M a year. The average Kroger store does $44M a year. The average Trader Joe's is doing $31M a year. Anyone with two eyes can see that these Amazon Fresh stores aren't bringing in even a small fraction of what these other stores are doing. This really is beginning to look more like a very expensive learning project and not a sustainable long term business. It is telling that most of these stores have opened in white elephant locations (sometimes they might be a highly visible store, but that might make it a white elephant too because the rent is too high). I seriously wonder what the leases look like and what kind of escape clauses are in there. Make no mistake - if these stores really ran year round spending that kind of payroll - and they added hundreds more - the expenses would bankrupt even a company like Amazon.