Development of Amazon Fresh stores on ‘pause.’ Will possible Staten Island location ever open?

STATEN ISLAND, N.Y. — The tell-tale, green-striped awning has been in place for almost a year, and rows of shopping cart bays have been sitting idle for months. Based on outward appearances – which include an enabled WiFi hotspot and a pending state liquor license — Amazon Fresh is ready for its Staten Island debut. But according to new statements from the e-tail giant’s CEO, the 44,448-square-foot strip-mall anchor will most likely remain a shell as the company puts all Fresh expansions on “pause.”

“I think if you want to have a mass physical store offering, you need a different offering, and that’s what we’ve been working on with Amazon Fresh,” Amazon CEO Andy Jassy said during a recent analyst call, which pinpointed several changes the company is making in the grocery sector. “We’ve decided over the last year or so that we’re not going to expand the physical Fresh doors until we have that equation with differentiation and economic value that we like, but we’re optimistic that we’re going to find that in 2023.”

Offering no details about ongoing projects, and actually never verifying that 430 New Dorp Lane was ever slated to be an Amazon Fresh, press reps for the conglomerate said they “don’t have anything further to share at this time” when questioned about the status of the Staten Island store.

But openings of other proposed Amazon stores across the country that had made more construction progress than the New Dorp location have already been suspended.

“We regularly review the Amazon Fresh pipeline, and we’ve learned a lot since we first opened our first store in 2020,” stated a letter from Amazon’s Economic Development division to borough officials in Woodland Park, N.J., that was published by northjersey.com. “We are taking the time right now to focus on our existing Amazon Fresh stores in the U.S.”

According to an article on northjersey.com’s website, other stores in development that have been “frozen” across the state include locations in various stages of completion in Eatontown, Old Bridge, Lodi and Holmdel.

Why the pause? Supermarket analyst Matthew Casey, owner of Matthew P. Casey & Associates in Rahway, told the Asbury Park Press that Amazon Fresh locations are “poorly producing stores.” He said in his store visits, employees assembling online orders for grocery deliveries outnumbered actual customers.

“They appear to be a 1970s supermarket with 2022 technology,” Casey said. “They have their Alexa at the end of the aisle, where you can ask Alexa where the maraschino cherries are. Meanwhile, they don’t have very knowledgeable supermarket people working in the stores.”

One supermarket pundit, David Bishop, partner and research lead at Bricks Meets Clicks, a retail consulting firm, told the Asbury Park Press that the stores “tend to be characterized as soulless,” with black shelves and ceilings often described by shoppers as “cold” and “dark.”

First reported by the Advance/SILive.com last May as a possibility for the borough, the supermarket tenant would serve as an anchor at Hylan Commons, replacing Applebee’s, Mandee, Justice and New York & Co. — all of which closed during the pandemic. The very modern food-shopping experience, which began launching in 2020, was originally born of the brand’s Amazon Fresh online grocery services, and features a strong presence in California (14 stores in total). The concept has reportedly been popular thanks to its competitive prices and free same-day delivery and pickup services.

The company currently has 44 Amazon Fresh locations and 28 Amazon Go stores in the United States, according to its website. Both the Fresh stores, which are similar to traditional supermarkets, and the Go stores, which are cashier-less convenience stores, had been widely considered a potential opportunity for the e-commerce giant to disrupt the traditional retail grocery space, Supermarket News reported.

Notable features in Fresh stores include the “Just Walk Out” shopping experience, which tracks everything you take off the shelf and then charges you accordingly. Amazon Dash Cart, a “smart” shopping cart, which enables customers to skip the checkout line by scanning a QR code. The cart uses a combination of computer vision algorithms and sensor fusion to identify and charge the items put into the cart. Alexa features are also available, allowing customers to manage their shopping list, as well as ask the assistant to help them find an item while in store.

The company noted on its website that Fresh stores feature “everything you typically find at a grocery store, with the low prices you expect from Amazon.” The site also noted that you do not need to be a Prime member to shop in-store, but customers who wish to use the self-serve technologies need to have an Amazon account with a linked credit or debit card.

It was not clear how many operating stores would be shuttered, and how many that had not yet opened would be abandoned. During the analyst call, Brian Olsavsky, senior vice president and chief financial officer for Amazon, said that the company has assessed its portfolio of Amazon Fresh and Amazon Go stores and decided to “exit certain stores with low growth potential.”

“I think that we have a very significant opportunity in the grocery segment,” Jassy added. “I think we’re building a pretty broad grocery network across online and physical, and you’re going to see us continue to work on it.”

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