Amazon Halts All New Amazon Fresh Just Walk Out Stores

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

buckguy wrote: February 8th, 2023, 8:14 am
ClownLoach wrote: February 7th, 2023, 5:46 pm
Romr123 wrote: February 6th, 2023, 8:19 am 18 billion brick and mortar...sure Jan. Maaaybe if you roll all WFM into it...I doubt you get the number that high.
Whole Foods annual revenue for 2017 was $16.0 billion.
Their prices have increased significantly since then; I would not be surprised if the price increases outweigh the traffic declines as the offering deteriorated under Amazon.
So it is probably accurate that all of Amazon brick and mortar is $18 billion... it still leaves Fresh and Go as such insignificant operations that they effectively are a rounding error. I doubt these Amazon Fresh stores are pulling in close to $100K a week including deliveries in many cases.
I think that the $720 Million cash impairment sounds like enough to pay for the necessary lease terminations, severance and liquidation of all Fresh stores, including the unopened ones, plus write off all the equipment and other "goodwill" assets. Unless there is a wave of WFM closings coming, which I somehow doubt after several were purged last year, that is a lot of money to set aside.

The Amazon Fresh banner is already completely toxic and will not be able to be rescued. The zombie stores alone have created incredible badwill against the brand especially where Amazon bullied their way into the locations by outbidding existing stores for the lease. The article states that they are going to quickly find what does resonate with customers. I would imagine they will have to either acquire or create a new nameplate for a new banner, and I also am going to assume the word "Amazon" is going to get left out this time. Maybe they will make a store under some variation of the "Prime" brand?
The brick and mortar excludes online orders picked-up at Whole Foods: https://www.winsightgrocerybusiness.com ... iscal-year so it is probably difficult to compare where they are now vs. 2017.

The same posting linked above suggests that the 18K job cuts are not as centered in brick and mortar as suggested previously and it doesn't sound like Whole Foods would be affected.

The 30 stores/year thing sounds like pure pr even if they really do have 50 stores in the pipeline. I wouldn't be surprised if some of them are Amazon Fresh locations that get launched as Whole Foods.
When they say online orders don't count, what they mean is the Amazon pickup counters they have in all Fresh locations, lockers, and now pickup counters at some WFM stores. If a customer ordered Whole Foods Market pickup at their local WFM that counts in the sales. It wouldn't make sense for say a customer to order a laptop computer and choose ship to the pickup counter at WFM but then the store gets credit for the laptop sale.
User avatar
norcalriteaidclerk
Assistant Store Manager
Assistant Store Manager
Posts: 542
Joined: August 22nd, 2010, 1:01 am
Location: 916/279 area code complex
Has thanked: 63 times
Been thanked: 42 times
Contact:
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by norcalriteaidclerk »

https://annandaletoday.com/amazon-fresh-store-in-limbo/

The northern Virginia suburbs of DC may not necessarily speak for everywhere,but it's a clear concession that Amazon fresh is a dead format walking.

Yet so far the municipal council of a Boston suburb appears to be sugarcoating the situation with a still unopened AF there.

https://www.itemlive.com/2023/02/08/few ... in-saugus/

Back in NorCal,even a local location that was hiring its first zone leads is apparently up in the air.
https://www.abc10.com/article/news/loca ... 37eca70f93

Sent from my SM-G781U using Tapatalk


For your life,Thrifty and Payless have got it.
marshd1000
Assistant Store Manager
Assistant Store Manager
Posts: 587
Joined: March 2nd, 2009, 1:46 pm
Been thanked: 12 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by marshd1000 »

Here’s something interesting about a possible direction for Amazon Fresh from Geek Wire:

https://www.geekwire.com/2023/amazon-ma ... hA8Wr6eZ8I
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

marshd1000 wrote: February 9th, 2023, 10:11 pm Here’s something interesting about a possible direction for Amazon Fresh from Geek Wire:

https://www.geekwire.com/2023/amazon-ma ... hA8Wr6eZ8I
Ego strikes again. With all their problems lately the Amazon name is what is tainted. Maybe they can find something that works then brand it Prime Market?

I did notice that the blackout has been removed from the windows on the zombie Corona site. The windows from about 10ft down are now covered and you can see into higher albeit tinted windows. They have installed all the lighting now and it does appear to be a different type of LED lighting than the previous Fresh stores. Since that is a full ground up new center I am sure they have a drop dead date they must open something by, which makes me really think that it will open as a Whole Foods since they're not going to easily escape the lease when the entire center was built expecting their presence as the only anchor. I did not see any active construction crew there yesterday. The construction company had removed their trailers from the site late last summer but just returned a few that they parked around the building sort of like a billboard, and a couple of weeks ago there were workers on the roof and unloading a freight company truck through the back dock door all visible from the miserable traffic jam on I-15 outside. No storage containers are on site aside from those construction company trailers. The cooling towers for the refrigeration system are on the building and fully visible from I-15 (I wonder if they were built this way to discourage copper thieves - hearing that a lot of stores are experiencing HVAC copper piping theft again). Still no way to know how much is actually installed inside the store itself aside from lighting.

The unfortunate thing about the entire Corona project is that the big box center across the freeway has some major openings still. Homegoods just opened up late last year and Sephora is under construction but they are still sitting on a closed Toys R Us/Babies combo store that would be the perfect size for a Whole Foods versus this smaller format built for Fresh. So they'll probably get a compromised 365-esque Whole Foods that will continue the brand consistency problems that need to be corrected on that side of the company.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by storewanderer »

I doubt "Amazon Market" will ever be opening.

Maybe they can buy some Save a Lot franchises and try that. Probably couldn't do much worse than they have with Amazon Fresh.

It will be interesting if this store being finished currently does end up opening as Amazon Fresh. I know they are saying expansion is paused but they may slip this one in if they legally have to open the thing...

Also I am curious what kind of experimentation they can do with Amazon Fresh if they let go of a lot of the people who were running Amazon Fresh.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

storewanderer wrote: February 11th, 2023, 7:49 pm I doubt "Amazon Market" will ever be opening.

Maybe they can buy some Save a Lot franchises and try that. Probably couldn't do much worse than they have with Amazon Fresh.

It will be interesting if this store being finished currently does end up opening as Amazon Fresh. I know they are saying expansion is paused but they may slip this one in if they legally have to open the thing...

Also I am curious what kind of experimentation they can do with Amazon Fresh if they let go of a lot of the people who were running Amazon Fresh.
I can't think of any other Amazon Fresh stores built from scratch in a new shopping center on fresh dirt. The requirements in those cases usually would include an ironclad opening deadline, and the excuses available are typically only documented construction delays and acts of God. Neither of which apply here.

In my last company there was one of those situations where we were a junior anchor co-tenant in what was supposed to be a new build shopping center anchored by a [redacted] store. This was about the same time as the Albertsons-Safeway merger which shook up that entire market. As a result the [redacted] store never broke ground as the chain wanted to wait and see how the local real estate market shook out due to the many divests nearby and the possibilities of taking over an existing building instead if space becomes available. Phase 1 was to be that [redacted] store, phase 2 was junior anchors and phase 3 was out parcels like drive through restaurants and a couple banks. Finally [redacted] missed their final deadlines to break ground and build the store, which caused a flurry of suits to be filed between themselves, the builders, the city, and the other co-anchors who had signed leases expecting to someday build and open next to [redacted]. We ultimately settled to having the lease torn up.

Basically Amazon isn't likely going to be able to buy their way out of that location. Every tenant nearby will sue claiming that they wouldn't have signed and built out without Amazon. Landlord will say the same, that if Amazon wasn't committed 100% they would not have broken ground. The co-tenants are really in trouble because there is zero pull in this center, and although Amazon has proven not to be the best they at least would attract "some" vehicular traffic that the other businesses could feed off. I would imagine everyone from Starbucks to the car wash are hemorrhaging money in this brand new ghost town. This won't end well if Amazon decides to be obstinate like they did in Bellevue and refuses to open. I could see this entire new center which is the gateway to a massive new housing development potentially wind up like those centers in west Phoenix that never were occupied and wound up being fenced off and boarded up. Then all the homeowners will sue because they were promised a grocery store shopping center within their community for easy walking trips and the boarded up empty Amazon on dead rent has ruined their property value. And then the home developers sue because nobody will buy their homes with the rotting carcass of this unopened Amazon at the gate. It just gets very very ugly.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

Today the pylon signs surrounding the Murrieta location have been changed from "Amazon Fresh" to "Amazon Fresh Grocery Store". Amazon must think that their lack of business is because people don't understand what is in the building? They must have even less understanding of basic retail than we gave them credit for. I would be willing to bet their conversion rate is less than 10%. Their problem isn't that customers don't know it is a grocery store. The problem is it's a mediocre, overpriced, out of stock filled grocery store.

Also a new shopping center has been under construction in Cypress, CA next to the Costco. For the first time it is clear that there is a box store toward the back of the new center. Bad location by design - restaurants under construction block the view. It seems really obvious this is yet another new Amazon Fresh.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by storewanderer »

Did they change the entire sign, or just throw in "Grocery Store" somewhere surrounding the existing sign?

Cannot believe they spent money on this. Obviously someone did a focus group of random respondents from who knows where (probably nationwide) and asked the question: Do you know what Amazon Fresh store type is? Enough answered no that someone actually proposed this idea and this idea was implemented.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

storewanderer wrote: February 18th, 2023, 12:02 pm Did they change the entire sign, or just throw in "Grocery Store" somewhere surrounding the existing sign?

Cannot believe they spent money on this. Obviously someone did a focus group of random respondents from who knows where (probably nationwide) and asked the question: Do you know what Amazon Fresh store type is? Enough answered no that someone actually proposed this idea and this idea was implemented.
They have not changed the store front yet, just changed the surrounding pylon signs along the street. Clearly some real low level consulting work must have led to this. My guess is that when they cleared house at the corporate offices they have brought on a large consulting firm like Accenture or AlixPartners and put them in charge of fixing it or killing it.
veteran+
Valued Contributor
Valued Contributor
Posts: 2234
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1204 times
Been thanked: 72 times
Status: Offline

Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by veteran+ »

ClownLoach wrote: February 18th, 2023, 11:16 am Today the pylon signs surrounding the Murrieta location have been changed from "Amazon Fresh" to "Amazon Fresh Grocery Store". Amazon must think that their lack of business is because people don't understand what is in the building? They must have even less understanding of basic retail than we gave them credit for. I would be willing to bet their conversion rate is less than 10%. Their problem isn't that customers don't know it is a grocery store. The problem is it's a mediocre, overpriced, out of stock filled grocery store.

Also a new shopping center has been under construction in Cypress, CA next to the Costco. For the first time it is clear that there is a box store toward the back of the new center. Bad location by design - restaurants under construction block the view. It seems really obvious this is yet another new Amazon Fresh.
I smell Fresh & Easy there.
Post Reply