Amazon Fresh: It’s Getting Stale
How about an update?
Back in June 2022, I posted about how long it seems EVERYTHING takes these days. One of the specific items mentioned in that June 2022 newsletter was our local Amazon Fresh store, which at that time was already more than a year overdue to open.
Well, I’m here to report that, as of April 3, 2023, it’s still sitting, forlornly unopened, no doubt gathering dust and maybe a few woodland creatures as it awaits its fate.
And what might that fate be? Well, last fall, in conversation with friends and family, I predicted that it would NEVER open, even though by all observations, it is mostly built, inside and out, but for some reason not… actually… open.
I stick by this utterly uninformed opinion based on the following:
- Since Amazon announced this store during the Roosevelt administration (Teddy, not Franklin), the entire world has changed and changed again. The retail environment is very different. The pandemic has made it harder to find retail workers and they must be paid more than before. That makes an already exceedingly competitive, razor-thin margin business (groceries) that much harder to master.
- The economy has changed. Inflation is up, people are more cautious with their dollars and there are fewer of those dollars in savings accounts now that the feds are no longer cutting Covid checks to anyone who can fog a mirror.
- Despite Amazon having dumped what is no doubt millions into building out this store, it is chump change. For Amazon. Jeff Bezos has roughly the same amount of money in his sock drawer to spend on dog treats or Pokémon cards or Mesopotamian papyrus porn (maybe that’s Bill Gates. I get my kinky billionaires confused…) or whatever he’s into. So yes, while it seems like a colossal waste of money to you and me, Amazon likely spends more on breakroom toothpicks (NOW 2% OFF FOR PRIME MEMBERS!) So, no biggie to walk away and let the raccoons take over.
- Amazon itself is changing. During the pandemic, it hired hundreds of thousands of new employees to keep up with the retail demand of “Covid bunker buying” as we all stayed home, hid under the bed, bought toilet paper and waited for the storm to pass.
Guess what: It has (mostly) passed. And, it turns out people still like to go to actual stores and buy stuff. Sure, the Amazon web site probably gained new customers during the pandemic who will continue to buy online, but the numbers are down. As is Amazon’s stock price. By a lot. And Amazon layoffs are just getting started.
“But wait!” you exclaim. “If people are going to physical stores again, isn’t that good for something like Amazon Fresh?”
Yes, but no. If our Amazon Fresh store ever did open, it would likely do pretty well. But Amazon is a gazillion dollar company and it would have to build hundreds or even thousands of Amazon Fresh locations to make a dent in the corporate P&L. And given the change in retail, it’s not at all clear that Amazon is willing to make that commitment. The fact that Amazon has a completely finished store that it refuses to open seems to indicate that its commitment to retail is far less than full-throated. And sure, Amazon jumped headfirst into the retail grocery cesspool when it acquired Whole Foods, but it might just be easier to abandon the whole physical retail store lark (spinoff?) and focus its energies on a huge market with better margins that can move the needle. Like healthcare. Which is exactly what Amazon is doing with new businesses like Amazon Pharmacy and the acquisition of One Medical, a subscription medical company.
So anyone local anxiously waiting for the opening of Amazon Fresh: don’t hold your breath. And if you insist on holding your breath, hope that Amazon gets into the funeral business. (COFFINS NOW 2% OFF FOR PRIME MEMBERS!)