July 7, 2020
Amazon plans to open more grocery stores across U.S.
Amazon is preparing to open its second automated-checkout grocery store in a Seattle suburb and is hiring managers for a third store in the nation's capitol.
The commerce giant's grocery strategy is also advancing on another front, with new locations of its conventional checkout grocery stores coming to Seattle, California, and the Chicago and Washington, D.C., areas.
The company says on its website a Go Grocery store is "coming soon" to what was formerly a Sears automotive building in Redmond, Wash. Amazon opened its first Go Grocery on Capitol Hill in Seattle this year after a lengthy development period, its latest move in an ongoing effort to capture more of consumers' grocery budget.
The Go Grocery concept is a larger version of the Go convenience stores it began testing publicly in late 2016 and which now number 26 locations in Seattle, New York, Chicago and San Francisco, though several are temporarily closed. The stores are equipped with cameras and other sensors that enable the company to bill shoppers through an app for items they pick off shelves, eliminating the need for a checkout line.
Amazon also introduced a grocery store format with a conventional checkout—separate from the Whole Foods Market chain it acquired in 2017—at a store in Woodland Hills, Calif., that opened early this year but was converted temporarily in March to fulfill online grocery orders only as the company struggled to catch up with a rapid increase in demand amid the growing coronavirus pandemic. A second store in Irvine, Calif., was similarly repurposed.
Grocery unions have decried Amazon's moves in the grocery business, citing the company's pursuit of automation as a risk to grocery store jobs and noting that it has maintained Whole Foods' anti-union stance.
"This company does not share the same values as our community, and Amazon's desire to replace workers is a threat to working people of all walks of life," Joe Mizrahi, secretary-treasurer of United Food and Commercial Workers 21, which represents more than 46,000 workers in Washington state.
To counter these criticisms, Amazon points to its hundreds of thousands of U.S. employees in warehouses, logistics networks and grocery stores—both automated and conventional.
An Amazon jobs site that previously listed openings for the Woodland Hills store now advertises positions for stores in Seattle, the Los Angeles area, the Chicago suburbs and the Washington, D.C., area.
Meanwhile, Amazon lists more than 180 openings for various roles on its Go stores team, including openings for retail associates in Redmond posted on Wednesday, and for managers of a Go Grocery store in the Washington, D.C., area.
A company spokesperson confirmed the Redmond and Washington, D.C., Go Grocery stores, as well as conventional stores coming to North Hollywood, Calif., and Chicago suburbs Oak Lawn, Schaumburg and Naperville. She gave no timelines for the opening of individual stores and declined to confirm the location of the Seattle store.
Amazon has bought and developed a range of grocery concepts as it vies for a bigger slice of the grocery business against U.S. market leaders Walmart and Kroger. In the first quarter, the company recorded net sales at all its physical stores—numbering 571 at the end of 2019, mostly Whole Foods but also including some that sell books and other merchandise—of more than $4.6 billion, up 7.7% from a year earlier. But that does not include online grocery orders that are fulfilled through its physical stores.
Some industry analysts see the company's development of its own line of conventional-checkout stores as a key to tapping grocery shoppers beyond the affluent Whole Foods demographic. Amazon also has demonstrated how its new stores can serve both online and in-person grocery shopping, a hybrid approach that is quickly becoming the norm across the industry—more so since the pandemic.
Meanwhile, many Whole Foods stores have been altered under Amazon's ownership to accommodate more online orders—with Amazon workers racing through the aisles to fulfill them—and as pickup points for other Amazon shipments.
Amazon's Go Grocery store in Seattle, opened in February, is about 10,400 square feet, stocks about 5,000 items in a broader array of categories than the Go convenience stores, and employs about three dozen people.
The Amazon spokesperson did not provide details of the Redmond store going into the Overlake Fashion Plaza. Plans filed with the city of Redmond indicate a floor area of about 19,500 square feet, with an outdoor dining area, though it wasn't immediately clear if the entire building would be occupied by Amazon. Craig Ramey, managing director at property owner Regency Centers, said the company was looking forward to completion of the project but provided no additional details.
Even before the coronavirus pandemic and ensuing recession, retail analysts said Amazon was well-positioned to take advantage of a commercial real estate market suffering from a glut of space left by shuttered stores as it grows its own physical retail footprint. Amazon's Woodland Hills, Calif., grocery store was formerly a Toys R Us, for example.
The Sears store in Redmond closed in 2018 as the retail stalwart of the 19th and 20th centuries spiraled toward bankruptcy.
Amazon also recently took space for its tech workers in the erstwhile Redmond Town Center Macy's.
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