As some readers may remember, I am not a big fan of Amazon Fresh BB #:283186 — at least not as a retail vendor. (Our family doesn’t do online grocery shopping.) https://www.producebluebook.com/2021/01/19/amazon-the-covid-grocer/
I have never been able to see it as a going concern.
Evidently Amazon is starting to feel the same way. Store openings, which commenced in September 2020 have stalled. Amazon plans grocery fee increase, higher threshold for Amazon Fresh deliveries – Produce Blue Book
It also has 22 “zombie” locations—stores that are set up but just haven’t opened—like this one in Tinley Park, IL. Amazon Mum On Delays In Tinley Park Fresh Store’s Opening: Village | Tinley Park, IL Patch
Some sources say that the Tinley Park store will meet its projected opening date of spring 2023.
But it is hard to avoid concluding that the great Amazon conquest of retail grocery is starting to stall.
I have long thought this would happen on the basis of my own experiences with Amazon Fresh. One sign is the fact that the place appears to be virtually empty at every hour. I didn’t even see many people there on the opening day of the Bloomingdale, IL, store.
It seems that Amazon—the gargantuan monster that looms over retail—may not be very good at retail itself.
Somehow, I could tell. Something just doesn’t seem right about the stores, although I can’t point my finger at what.
It’s like going to a stupid doctor (and there are a lot of them out there). You can tell he’s an idiot even though you don’t have the medical background to say why.
It’s worth noting that Amazon’s financial report this week showed a rise in store sales in the fourth quarter and the year but lower online sales in Q4, and lower net income for the quarter, with nearly a $3 billion net loss for the year. Amazon sees brick-and-mortar sales rise, online sales dip in Q4 and fiscal year (winsightgrocerybusiness.com)
Amazon’s Whole Foods BB #:147784 is having trouble of its own—asking vendors to cut their prices. https://www.axios.com/2023/01/31/whole-foods-market-prices
It’s not like Walmart asking vendors to cut prices. When a company the size of Walmart asks you for something, it is really telling you.
The spindliest kid on the block can never hope to be the bully.
Furthermore, Whole Foods and Amazon Fresh are both increasing delivery charges. This is understandable in the wake of the price surges that have affected everyone, but if, like many people today, you are strapped for cash for groceries, a $9.95 delivery fee is one very tempting item to slash.
(For similar reasons, I am doubtful of recent estimates of a 12 percent cumulative growth for online grocery by Mercatus and Brick Meets Click. “Persistent price inflation, ongoing concerns about illnesses such as COVID, RSV, and the flu, and a maturing online segment are factors contributing to the outlook,” says the accompanying press release, although if you think about it, “price inflation” and a “maturing online segment” on fixed incomes are likely to presage the exact opposite. U.S. eGrocery sales forecast to grow, increase market share in next five years – Produce Blue Book)
Retail grocery is a difficult and subtle business. I do not think skills in other retail sectors (much less online shopping) translate very well to success here.
Certainly, Whole Foods is a sadder and sparser place since Mr. Bezos’ empire acquired it in 2017. Introducing that 365 store brand was a great innovation, but I can think of no other changes that were beneficial.
I suspect that Amazon will be bailing out of retail grocery within the next couple of years and sell its businesses to someone who really does understand this business.
Maybe the newly emergent Kroger-Albertsons gargantua?
I don’t think the Justice Department would like that.
As some readers may remember, I am not a big fan of Amazon Fresh BB #:283186 — at least not as a retail vendor. (Our family doesn’t do online grocery shopping.) https://www.producebluebook.com/2021/01/19/amazon-the-covid-grocer/
I have never been able to see it as a going concern.
Evidently Amazon is starting to feel the same way. Store openings, which commenced in September 2020 have stalled. Amazon plans grocery fee increase, higher threshold for Amazon Fresh deliveries – Produce Blue Book
It also has 22 “zombie” locations—stores that are set up but just haven’t opened—like this one in Tinley Park, IL. Amazon Mum On Delays In Tinley Park Fresh Store’s Opening: Village | Tinley Park, IL Patch
Some sources say that the Tinley Park store will meet its projected opening date of spring 2023.
But it is hard to avoid concluding that the great Amazon conquest of retail grocery is starting to stall.
I have long thought this would happen on the basis of my own experiences with Amazon Fresh. One sign is the fact that the place appears to be virtually empty at every hour. I didn’t even see many people there on the opening day of the Bloomingdale, IL, store.
It seems that Amazon—the gargantuan monster that looms over retail—may not be very good at retail itself.
Somehow, I could tell. Something just doesn’t seem right about the stores, although I can’t point my finger at what.
It’s like going to a stupid doctor (and there are a lot of them out there). You can tell he’s an idiot even though you don’t have the medical background to say why.
It’s worth noting that Amazon’s financial report this week showed a rise in store sales in the fourth quarter and the year but lower online sales in Q4, and lower net income for the quarter, with nearly a $3 billion net loss for the year. Amazon sees brick-and-mortar sales rise, online sales dip in Q4 and fiscal year (winsightgrocerybusiness.com)
Amazon’s Whole Foods BB #:147784 is having trouble of its own—asking vendors to cut their prices. https://www.axios.com/2023/01/31/whole-foods-market-prices
It’s not like Walmart asking vendors to cut prices. When a company the size of Walmart asks you for something, it is really telling you.
The spindliest kid on the block can never hope to be the bully.
Furthermore, Whole Foods and Amazon Fresh are both increasing delivery charges. This is understandable in the wake of the price surges that have affected everyone, but if, like many people today, you are strapped for cash for groceries, a $9.95 delivery fee is one very tempting item to slash.
(For similar reasons, I am doubtful of recent estimates of a 12 percent cumulative growth for online grocery by Mercatus and Brick Meets Click. “Persistent price inflation, ongoing concerns about illnesses such as COVID, RSV, and the flu, and a maturing online segment are factors contributing to the outlook,” says the accompanying press release, although if you think about it, “price inflation” and a “maturing online segment” on fixed incomes are likely to presage the exact opposite. U.S. eGrocery sales forecast to grow, increase market share in next five years – Produce Blue Book)
Retail grocery is a difficult and subtle business. I do not think skills in other retail sectors (much less online shopping) translate very well to success here.
Certainly, Whole Foods is a sadder and sparser place since Mr. Bezos’ empire acquired it in 2017. Introducing that 365 store brand was a great innovation, but I can think of no other changes that were beneficial.
I suspect that Amazon will be bailing out of retail grocery within the next couple of years and sell its businesses to someone who really does understand this business.
Maybe the newly emergent Kroger-Albertsons gargantua?
I don’t think the Justice Department would like that.
Richard Smoley, contributing editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published 12 books.
