Amazon Rolls Out A New Supermarket Chain In A Bid To Disrupt The Grocery Business

Amazon Fresh was meant to be a game changer in the grocery business – a store where you could grab things off the shelf and walk out without going to a cash register, your account automatically debited by sensor technology. It didn’t quite turn out that way, but now the e-commerce giant is having another go. 

Late in the summer of 2023, Amazon Fresh made headlines for laying off employees, a clear sign that its automated or “shop and go,” shopping experiment had failed. 

Don't Miss:

• This 12,000 RPM Spinning Battery With Over $100 Million In LOIs Could Be The Missing Link For Green Energy — Here’s Why Early Investors Are Flocking To Invest Before Funding Closes
• With 100+ historic trademarks including some of the high grossing characters in history, like Cinderella, Snow White and Peter Pan, this company is transforming the $2 trillion entertainment market with patented AR, VR, and AI tech. — For a short window, investors are able to claim $2/share ($980 min).

“When Amazon entered this business, their assumption was they could use technology to compensate for their late entry, for their lack of scale and lack of a large physical network,” Karan Girotra, a professor at Cornell Tech, told NPR at the time of the layoffs. “The hope was technology would give them an edge, but it didn’t really happen.”

New Decor And A Whole Foods Expansion

CEO Andy Jassy said at the time that the company wouldn’t open new Fresh stores until it reevaluated its grocery model. That time is apparently now. In November, the company opened a 59,000-square-foot store at Plaza 46 in Woodland Park, New Jersey. This was followed by revamped Fresh locations in suburban Chicago and Los Angeles with brighter, airier decor. In addition, CoStar reports that Amazon is expanding its Whole Foods footprint, the upscale supermarket chain it bought seven years ago.

See Also: ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum. 

Leveraging Amazon Prime

Amazon has a clear advantage over many of its competitors in the supermarket business. According to Statista, as of 2024, it had 180 million registered Prime members in the U.S. By leveraging its massive membership base and offering incentives for grocery shopping, Amazon hoped to upend the grocery store business dominated by Walmart, Dollar Tree, Costco, Kroger, Albertsons Cos., Ahold Delhaize and Wegmans, not to mention Lidl and Aldi, the latter of which owns the wildly popular Trader Joe’s. 

The CoStar article points to Amazon retooling its grocery store operation to leverage its Prime membership further, dovetailing some operations with their Whole Foods locations while offering shoppers increased retail options. These include:

• Opening a smaller store, Amazon Grocery, at a Whole Foods location in Chicago 
• A small-format Whole Foods store, Whole Foods Market Daily Shop, has opened in New York and is expected to come to Washington, D.C. 
• Shipping Whole Foods orders from Amazon Fresh fulfillment centers 
• Conducting a trial in greater Phoenix where customers can shop for grocery items – including fresh food – alongside millions of Amazon.com products and have them delivered together within hours.

Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

The Brick And Mortar Priority

Despite its brand name value and membership tie-ins, Amazon acknowledges the challenge of becoming a major player in brick-and-mortar supermarkets. 

“We already have a large online grocery business and millions of products available for fast delivery and the next step is to continue building out our physical presence – which will require significant innovation and persistence,” Amazon spokesman Griffin Buch told CoStar News.

“We’ll continue to open new Whole Foods Market stores and will do so selectively with Amazon Fresh as we see results we like. We’re encouraged by early signs of our new store design in Chicago and Southern California and will proceed adaptively.”

Unlike Amazon’s e-commerce business, many grocery store shoppers prefer to shop in person to examine the produce before buying it. That takes away from Amazon’s traditional advantage. Additionally, many shoppers are entrenched and loyal to shopping and supermarkets they have shopped at for years. In a business with small margins, freshness is Paramount. A brick-and-mortar store safeguards that in the eyes of the shopper.

“If you want to serve as many grocery needs as we do, you have to have a mass physical presence,” Amazon CEO Andy Jessy said. “And that’s what we’ve been trying to do with Fresh over several years. We’ve been testing [the second version] of our Fresh format in a few locations near Chicago, in a few locations in Southern California. It’s very early, it’s just a few months in, but the results thus far are very promising and on almost every dimension."

Read Next:

• Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share!
• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?