Amazon Fresh appears to be continuing its slow and stealthy expansion, giving little clue to the brand’s long-term vision. Last week news broke of two possible new locations, each in a market previously untapped by the grocery brand.
On Thursday, September 30, USA Today’s Quincy, The Patriot Ledger of Massachusetts reported that the Town of Braintree, Massachusetts, Planning Council had approved a 37,500 square foot Amazon Fresh store, the company applying under the pseudonym “Seritage KMT Finance LLC”, according to a letter to the city, “for confidentiality purposes”.
Meanwhile, last Tuesday (September 28), Eden Prairie Local News, a local nonprofit media outlet in Eden Prairie, Minnesota, reported that the city’s planning commission had approved plans for a 40-storey grocery store. 000 square feet from an anonymous owner, one it’s a national grocer, and the plans came with a rendering very similar to Braintree’s. Additionally, architect NORR has ties to previous Amazon Fresh projects.
While Amazon appears to be making plans for physical locations to come, it is also creating new ways to integrate its offerings into consumers’ daily lives with contextual business integrations. On Tuesday (October 5), Insider announced that Amazon was developing a smart refrigerator that would prompt orders from Whole Foods or Amazon Fresh when consumers run out of a given item.
Amazon’s grocery efforts have been somewhat erratic throughout 2021, with some moments suggesting impressive growth and others showing significant uncertainty about the future of the grocery business. ‘business. Amazon started the year by shutting down its Prime Pantry services in early January, integrating the shelf life program on Amazon’s main website. In March, the company opened a UK store of its cashless Amazon Go convenience stores, the first of its kind outside of North America. In May, the company merged its Amazon Go Grocery business, the grocery arm of the convenience store chain, into its Amazon Fresh grocery brand. Shortly thereafter, the company announced its first full-size Amazon Fresh store that is “Just Walk Out” compatible.
The company’s Whole Foods Market grocery brand has also undergone significant changes this year. On the one hand (literally), Amazon is trying cutting edge payment methods like Amazon One palm scans and Just Walk Out payment at some Whole Foods stores. On the flip side, Amazon recently announced a fee of around $ 10 for Prime members commanding at Whole Foods for delivery to certain cities, a move that threatens to alienate a significant portion of the grocer’s customer base. Additionally, Whole Foods co-founder and CEO John Mackey, who has been central to the brand, recently announced his retirement, suggesting major changes ahead.
For the most part, the company’s corporate communications throughout 2021 made little mention of Amazon’s intentions for its grocery chains going forward.
There haven’t been many comments since March, when the company’s chief financial officer Brian Olsavsky told analysts, “The grocery store has been a big eye-opener during the post-pandemic period here. I think people really appreciate the ability to have it delivered to your doorstep, and we’ve seen that as the numbers increase dramatically before and after the pandemic… in Fresh stores it’s a bit too early… we are confident that the Just Walk Out technology will be a godsend, a benefit to customers, and we’re very excited about what’s happening, but it’s still very early in day one.
When it comes to grocery sales, Amazon lags its competitor Walmart, the world’s largest grocer, by an order of magnitude. Recent research from PYMNTS indicates that Walmart has an 18.9% share of total food and beverage sales, while Amazon lags far behind at 1.9%. Even at Walmart’s lowest point in the past two years, capturing just 18.1% of the total market, Amazon’s share was still a factor of 10 lower.
Read more: Amazon’s food fight fails to downplay Walmart’s 10-to-1 lead
For a moment in 2018, it looked like Amazon was going to take over as its share of the category more than doubled for two consecutive years. However, after this period of rapid growth, the company’s share in the category stagnated at 1.9%.