Rollout of Amazon Fresh gains momentum

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SEATTLE — Amazon is moving closer to a wide-scale rollout of its Amazon Fresh grocery format after opening its 11th location in Bloomingdale, Ill.

According to a report by Bloomberg, Amazon has at least 28 more locations in the works in markets spanning the country from Sacramento to Philadelphia. Amazon would confirm only five upcoming locations: Long Beach, Calif.; Woodland Park and Paramus, N.J.; and Seattle and Bellevue, Wash. Bloomberg based its figure on planning and permit documents, state licensing rolls and news reports.

Of the 11 existing sites, seven are located in Calif. The first store debuted last September in the Los Angeles suburb of Woodland Hills, followed by openings in Northridge, North Hollywood, Irvine and the Westchester community of Los Angeles. January saw the addition of a store in Whittier, followed last month by the opening of a 45,000-square-foot store in Fullerton.

The new store in Bloomingdale is the company’s fourth store in Illinois, joining outlets in Naperville, Oak Lawn and Schaumberg.

The online behemoth also operates two Go Grocery outlets, the largest of which measures 13,000 square feet, and 26 Amazon Go convenience stores that measure from 1,200 to 2,700 square feet except for one employee-only facility. The Amazon Fresh units range in size from 25,000 to 45,000 square feet.

Last year Amazon concluded a warrant agreement with grocery wholesaler SpartanNash Co. that gives it the right to acquire a minority stake in the company, which is the fifth-largest food wholesaler in the country. SpartanNash has been supplying Amazon with groceries since 2016 and distributes to about 2,100 independent supermarkets as well as to Dollar General, its largest account. Acquisition of SpartanNash would give Amazon the infrastructure for a vertically integrated grocery supply chain to support a full-scale rollout of Amazon Fresh or other grocery formats yet to appear.

The Amazon Fresh concept has drawn media attention for its high-tech features, which include digital price tags and Amazon Dash smart shopping carts that allow customers to find items and track their purchases for quick fill-in shopping trips and skip the checkout line. The Naperville, Ill., unit is also testing its Just Walk Out cashierless checkout technology but is not yet offering it for customer use, according to Bloomberg.

According to Bill Bishop, chief architect and cofounder of Brick Meets Click, an analytics and strategic insight firm, the Amazon Fresh format promises to be a more formidable competitor for traditional grocery stores than its first stores appear at first glance.

“Its new Amazon Fresh store has a value proposition that appeals to today’s shoppers, and it combines the flexibility to meet changing customer needs with lower operating costs,” Bishop wrote in a company blog. “A closer look reveals that Amazon Fresh is a digitally integrated grocery store, merchandised for today’s customers, that provides a seamless shopping experience. Its low break-even sales volume means that it can operate profitably in intensely competitive markets.”

More recent follow-ups by the Brick Meets Click team reveal differences in the shopping experience at different Amazon Fresh locations. For example, the Schaumberg, Ill., store rated considerably higher than the Naperville unit. While the latter largely failed to impress as a brick-and-mortar grocer, the Schaumberg store had “sizeable appeal” based on such factors as quality of fresh and prepared foods, brand choices and speed of the shopping trip.



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