New Amazon Grocery Format Opens to the Public
Amazon's first-ever traditional grocery banner has officially opened to the general public after a few weeks of an invitation-only soft launch.
The new grocery format called Amazon Fresh is welcoming everyone in Woodland Hills, Calif., with 15 cent bananas, freshly baked pizza slices for $1.97, and rotisserie chickens for $4.97.
"Amazon Fresh is a new grocery store designed from the ground up to offer a seamless grocery shopping experience, whether customers are shopping in-store or online," Jeff Helbling, VP of Amazon Fresh stores. "We’ve taken our decades of operations experience to deliver consistently low prices for all, and free, same-day delivery and pick-up for Prime members."
The store, which had opened to customers on an invitation-only basis on Aug. 27, offers a wide assortment of private and national brands and produce, meat and seafood departments. The store also features a range of local LA favorites including pastries from Rockenwagner Bakery, coffee from Groundwork Coffee, cured meats from Maestro Sausage, beer from Angel City Brewery, and more.
Some of the low prices customers can expect when they shop the store every day include:
- Bananas, 15 cents
- Freshly baked bread, 89 cents
- Freshly baked pizza slices, $1.79
- Rotisserie chickens, $4.97
- Fresh brand Natural Whole Chicken with no added hormones, 99 cents/lb.
- 3 lb. bag of onions, $1.69
- 10 count of Quaker Oatmeal (all flavors), $2.50
- Paninis and hoagies made in store daily, $5.99
Grand opening deals include:
- Coca-Cola 12-pack (12 fl. oz. cans), $2.69
- Frito-Lay chips (7.75-9.75 oz.), buy one get one free
- Cheerios cereal (10.8-15.2 oz.), $1.99
- Strawberries (16 oz. container), $1.99
- Organic seedless grapes, $1.79/lb.
- Atlantic salmon filets, $5.99/lb.
- USDA Choice Fresh brand New York strip steak, $7.69/lb.
- Cursive Rosé, $9.29
The new Amazon Fresh format will also offer a range of prepared foods made in-store every day, from fresh-baked bread and made-to-order pizzas, to rotisserie chickens and hot sandwiches such as brisket panini.
"Since opening to invited customers over the past few weeks, we have received positive feedback from customers who have enjoyed our freshly prepared foods, with our classic pepperoni and pesto chicken pizza slices being among our top sellers, along with our spicy tiger sushi roll and rotisserie chickens," Helbling said.
At Amazon Fresh, customers can choose to use traditional shopping carts and a regular checkout experience, or they can use the new Amazon Dash Cart, which helps make a quick shopping trip even quicker by skipping the checkout line. Customers simply place their bags in the cart, sign in using their Fresh QR code in the Amazon app, shop, and exit through the Dash Cart lane to automatically complete their payment. The cart uses a combination of computer vision algorithms and sensor fusion to identify items put in the cart.
In addition to the convenience of the Amazon Dash Cart, customers can find items in the store easier by using Alexa and Alexa shopping lists. When customers arrive in store, they can access their Alexa shopping list through the Amazon app or on the Amazon Dash Cart, enabling them to navigate the Amazon Fresh aisles and check off items as they shop.
Of course, the new Fresh store will have pandemic safety measures in place for the foreseeable future. Helbling said that the company has taken learnings from Whole Foods and applied the same safety measures in Amazon Fresh stores: requiring daily temperature checks for all employees, requiring face coverings for all employees and customers entering the store, offering free disposable masks for any customer who wants one, and operating the store at 50% capacity. Store hours for the new Fresh will be from 7 a.m. to 10 p.m. every day.
According to Helbling, the company will open additional Fresh stores in the Los Angeles and Chicago regions. Many more are sure to come.
"We're currently operating online grocery delivery from Woodland Hills, Irvine and Northridge," Helbling said. "We've also announced that we're going to open a Fresh store in North Hollywood shortly. And in Chicago, we're operating online grocery delivery out of our Naperville store, and we've announced that we're going to open in Oak Lawn and Schaumburg."
The opening of Amazon's new Fresh concept comes a month after the company reported sales that surpassed all estimates for the second quarter, proving that shoppers continued to turn to the online giant during the COVID-19 pandemic. Amazon's net sales increased 40% to $88.9 billion in the second quarter, compared with $63.4 billion in the second quarter of 2019.
Grocery sales were also a bright spot during this time period. Amazon increased grocery delivery capacity by more than 160% and tripled grocery pickup locations to support customers not wanting to shop in stores during COVID-19. The result was that grocery sales tripled in the second quarter when compared with the same period last year.
Amazon's physical-store sales, however, were down 13% to $3.774 billion, compared with $4.330 billion in the second quarter of 2019. A portion of the decline may be attributed to how Amazon reports physical-store sales. Unlike other retailers, Amazon's physical store sales reflect only those sales where customers physically select items in a store. Orders placed online with Whole Foods Market, either for curbside pickup or delivery, are classified as online sales. The approach is the opposite of how retailers such as Kroger, Walmart or Albertsons account for digital sales, and tends to obscure the true performance of Whole Foods, especially as more shoppers choose digital methods of fulfillment.
As for why Amazon is opening a physical store when so much of the demand for groceries is shifting online, Helbling said the short answer was to give to give customers the choice.
"You know, we find certainly that online shopping, as you well know, is up during the pandemic," he continued, "but a lot of customers still prefer to shop either all the time or a lot of the time in a physical grocery store. And so we're investing in online, and we're investing in a store. This store is sort of a manifestation of this. And so that's why we're doing it. We want to give customers choices."
No. 2 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America, Amazon is also planning grocery stores in the Los Angeles and Philadelphia markets, according to media reports. Austin, Texas-based Whole Foods is No. 24 on the list.
