Amazon Halts All New Amazon Fresh Just Walk Out Stores

[ClownLoach]

Whole Foods is very diminished under Amazon.

The short lived "price reduction" campaign is in reality, gone (at best, insignificant).

The price to experience value is untenable. Why shop there only to face the same conditions of a regular supermarket with no baggers up front, very few employees on the sales floor providing customer service and indifferent service counter employees? Adding insult to injury? There are so many "employees" on the sales floor pulling orders for online customers that it makes navigating the store and shopping annoying at best.

Plus, Amazon does not seem interested in upgrading WF in my area! The 3 closest stores to me are the antithesis of flagship and parking is nighmarish.

I don't mind high price as long as I am getting, top quality, top service and top convenience (like parking for goodness sakes).

I cannot name one Whole Foods that has undergone a remodel since Amazon took over. It seems like they have eliminated CapEx. The Amazon service aspect is inconsistent from store to store. I've seen the temporary usage of the front lobby, the customer service desk, and even a checkstand for Amazon returns. I think they just picked whatever existing space was available to avoid spending the money on a properly walled off service window like the Fresh stores have. I haven't been to the new location in Sherman Oaks which I believe has Just Walk Out, but I recall reading that it is about 29K so very small for a Whole Foods and probably not consistent with any new prototype they may have. Long Beach moved in late 2019 and they just have a combined customer service desk next to the checklanes.

[pseudo3d]

Whole Foods is very diminished under Amazon.

The short lived "price reduction" campaign is in reality, gone (at best, insignificant).

The price to experience value is untenable. Why shop there only to face the same conditions of a regular supermarket with no baggers up front, very few employees on the sales floor providing customer service and indifferent service counter employees? Adding insult to injury? There are so many "employees" on the sales floor pulling orders for online customers that it makes navigating the store and shopping annoying at best.

Plus, Amazon does not seem interested in upgrading WF in my area! The 3 closest stores to me are the antithesis of flagship and parking is nighmarish.

I don't mind high price as long as I am getting, top quality, top service and top convenience (like parking for goodness sakes).

I expect that the Austin management might put together a bid to buy WFM from Amazon, but they'll have their work cut out for them...though they may not have to worry about the 365 stores after this week.

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

So, going to lock it in--
- Amazon Go...gone.
- Amazon Fresh...about about a third to a half of the stores closed immediately. The rest will be up for sale with no closing date announced. Zombie stores are also on the market and will not open.
- Whole Foods...put on the market. Some stores will close, but mostly 365 stores.

This is going to cause their stock to take a hit. I have no idea how they'll spin it to soften the blow.

[ClownLoach]

Whole Foods is very diminished under Amazon.

The short lived "price reduction" campaign is in reality, gone (at best, insignificant).

The price to experience value is untenable. Why shop there only to face the same conditions of a regular supermarket with no baggers up front, very few employees on the sales floor providing customer service and indifferent service counter employees? Adding insult to injury? There are so many "employees" on the sales floor pulling orders for online customers that it makes navigating the store and shopping annoying at best.

Plus, Amazon does not seem interested in upgrading WF in my area! The 3 closest stores to me are the antithesis of flagship and parking is nighmarish.

I don't mind high price as long as I am getting, top quality, top service and top convenience (like parking for goodness sakes).

I expect that the Austin management might put together a bid to buy WFM from Amazon, but they'll have their work cut out for them...though they may not have to worry about the 365 stores after this week.

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

So, going to lock it in--
- Amazon Go...gone.
- Amazon Fresh...about about a third to a half of the stores closed immediately. The rest will be up for sale with no closing date announced. Zombie stores are also on the market and will not open.
- Whole Foods...put on the market. Some stores will close, but mostly 365 stores.

This is going to cause their stock to take a hit. I have no idea how they'll spin it to soften the blow.

All 365 stores have already been rebranded as Whole Foods. They have received minimal Capex however aside from new signage.

[pseudo3d]

Whole Foods is very diminished under Amazon.

The short lived "price reduction" campaign is in reality, gone (at best, insignificant).

The price to experience value is untenable. Why shop there only to face the same conditions of a regular supermarket with no baggers up front, very few employees on the sales floor providing customer service and indifferent service counter employees? Adding insult to injury? There are so many "employees" on the sales floor pulling orders for online customers that it makes navigating the store and shopping annoying at best.

Plus, Amazon does not seem interested in upgrading WF in my area! The 3 closest stores to me are the antithesis of flagship and parking is nighmarish.

I don't mind high price as long as I am getting, top quality, top service and top convenience (like parking for goodness sakes).

I expect that the Austin management might put together a bid to buy WFM from Amazon, but they'll have their work cut out for them...though they may not have to worry about the 365 stores after this week.

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

So, going to lock it in--
- Amazon Go...gone.
- Amazon Fresh...about about a third to a half of the stores closed immediately. The rest will be up for sale with no closing date announced. Zombie stores are also on the market and will not open.
- Whole Foods...put on the market. Some stores will close, but mostly 365 stores.

This is going to cause their stock to take a hit. I have no idea how they'll spin it to soften the blow.

All 365 stores have already been rebranded as Whole Foods. They have received minimal Capex however aside from new signage.

They are still the undersized and minimum-service 365 format and are not up to par with "real" WFM stores. If Amazon wants to save WFM, they gotta go.

[mjhale]

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

Are you thinking that Kroger would want Whole Foods as a high end specialty grocery retailer to add to its stable of chains? It certainly would bring in the higher end demographics to the Kroger world. And I'd think they could pull it off without too much trouble because a lot of people don't see Whole Foods as a direct competitor to the local grocery store. Not like how people are scrutinizing the Kroger-Albertsons deal. I can't imagine that Kroger would want Whole Foods just for store locations for their own chains. Whole Foods isn't that damaged that it is fodder for other grocery store operations.

[pseudo3d]

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

Are you thinking that Kroger would want Whole Foods as a high end specialty grocery retailer to add to its stable of chains? It certainly would bring in the higher end demographics to the Kroger world. And I'd think they could pull it off without too much trouble because a lot of people don't see Whole Foods as a direct competitor to the local grocery store. Not like how people are scrutinizing the Kroger-Albertsons deal. I can't imagine that Kroger would want Whole Foods just for store locations for their own chains. Whole Foods isn't that damaged that it is fodder for other grocery store operations.

Whole Foods would be a high-end complement to Kroger's existing portfolio, yes. A lot of the WFM stores don't even have direct competition to other Kroger stores (and are not directly competing) and they were rumored to be interested in The Fresh Market back when that chain started to pull back expansion in the mid-2010s. The one catch that might be trouble is Mariano's since they both target higher-end areas.

I think a bigger prize for Kroger is if they get Rite Aid while their chips are down, since that seems to check off a lot of boxes that they'd get with the Albertsons merger without all the grief.

[ClownLoach]

I expect that the Austin management might put together a bid to buy WFM from Amazon, but they'll have their work cut out for them...though they may not have to worry about the 365 stores after this week.

I also believe that depending on how big the fallout is, it might also affect the Kroger-Albertsons merger, as one of their justifications was that Amazon was a threat to them. Plus, if the merger is called off, it allows Kroger to pursue WFM (or Rite Aid, for that matter).

So, going to lock it in--
- Amazon Go...gone.
- Amazon Fresh...about about a third to a half of the stores closed immediately. The rest will be up for sale with no closing date announced. Zombie stores are also on the market and will not open.
- Whole Foods...put on the market. Some stores will close, but mostly 365 stores.

This is going to cause their stock to take a hit. I have no idea how they'll spin it to soften the blow.

All 365 stores have already been rebranded as Whole Foods. They have received minimal Capex however aside from new signage.

They are still the undersized and minimum-service 365 format and are not up to par with "real" WFM stores. If Amazon wants to save WFM, they gotta go.

I don't think it is that simple. Some of these 365 locations are massively successful despite their deficiencies. If they received appropriate remodels to add in features of a full line WFM they would be even more profitable. But Amazon isn't giving the Capex needed. The 365 stores are about the same size as a good smaller WFM like Monterey if remodeled to densify the sales floor, put in full height gondolas and refrigeration, etc. WFM runs a very good store in Laguna Beach that is about the size of a Walgreens, and it has a remarkable assortment stacked to the rafters to maximize the space.

The problem is that the ex-365 stores are operating with ghastly pegboard and plywood decor, 5 foot gondolas like a CVS, coffin refrigeration, and are dependent on transferred prepared foods from a larger neighboring store. Long Beach 365 is probably just as busy as the Long Beach PCH store that is double the size. That means it is probably even more profitable because of the lower overhead. They closed quite a few 365 stores including the "flagship" Bellevue store when they purged the sub brand. I would assume that the remaining 365 stores, although hideous operations, are profitable. The real problem is that they have so much potential to grow sales if they were properly remodeled, but Amazon isn't giving WFM CapEx dollars and instead has dumped all of that money into failures like 4 Star Stores and Fresh.

There are plenty of full size WFM stores that don't pull their weight too. I doubt that Irvine breaks even as they over saturated the area, but they can't get out of the ironclad anchor agreement lease and probably justify the existence by saying that eventually another 10,000 homes are going up in Northern Irvine (nowhere near this failing store).

I'll throw one more idea out - small stores aren't a problem for WFM. Big stores are. They no longer have the payroll to operate the big 70-80K stores, are not allowed to locally source goods to fill them up anymore, are not allowed to create their own restaurant concepts or cook outside the (limited) company formula cookbook, and they are operating as a shadow of their former selves. If anything needs to go it may be their largest buildings. They did a minor reset on Tustin which was a giant flagship and basically gutted out specialty departments except for what fit on the perimeter then condensed the entire store including the registers backwards, leaving a giant boring seating area and space rented to Mendocino Farms. They have more empty floor space than anything else in this store that used to have a Brazilian barbecue, taco stand, candy shop, barbecue restaurant, and so on; it was comparable to Wegman's. All those islands within the store were yanked out and replaced with bare concrete. It is a pathetic shadow of its former self and probably could be reduced in size by 50% or relocated to a smaller location.

Closing 365 conversions at this point is like doing an amputation for a papercut using a chainsaw. They are not the problem. Poor real estate strategy, lack of investment and interest overall is.

[veteran+]

Kroger would continue the ruination of Whole Foods. I believe it would be worse than what Albertsons did to Bristol Farms.

Mainstream supermarket companies don't have a good track record of "curating" and nurturing special formats. It is not their forte or even desire (no matter what they say).

Whole Foods needs to go independent again or perhaps Good Food Holdings may be interested?

[ClownLoach]

Kroger would continue the ruination of Whole Foods. I believe it would be worse than what Albertsons did to Bristol Farms.

Mainstream supermarket companies don't have a good track record of "curating" and nurturing special formats. It is not their forte or even desire (no matter what they say).

Whole Foods needs to go independent again or perhaps Good Food Holdings may be interested?

Good Food is too small and has their own problems. The stunning high end stores their parent company was showing off in Korea have all closed after only a few years of operation, some closed before COVID. The company bought New Seasons, their largest acquisition yet, and they're having serious labor issues and a contested unionization situation. (Basically they're unionizing because Good Food bought them). Bristol is down to 14 stores and we know that they are bleeding out from the new Irvine flagship. They would go down faster than Haggen did under the weight of WF's problems and cost.

The best possible solution is for Amazon to do a recapitalization of WF so they can fund projects like fixing the 365 stores that require "gut to the 4 walls and start again" remodels, then spin it off with a really good management team (possibly rehire as many of the founders as will return). Amazon can hold onto as much or as little of the stock as they choose. I think they would be happy to hold 50% +1 share to ensure that the company is not acquired by anyone they don't want to own it.

[veteran+]

Wow, did not know Good Foods was so awful.