Podcast: Amazon’s uphill battle in the grocery sector

As far as grocery goes, it’s all a go for delivery king Amazon.

Amazon, which has brick-and-mortar stores under the Whole Foods, Amazon Fresh and Amazon Go names, has made physical food stores one of the cornerstones of its corporate strategy in 2023. CEO Andy Jassy emphasized grocery during Amazon’s Q1 financial call in late April. During the meeting, he said Whole Foods Market continues to grow nicely and that there were a number of changes in the past year that have changed the profitability trajectory. As for Amazon Fresh, Jassy hopes the pause in establishing new brick-and-mortars will pay off down the line. The CEO said a set of experiments and concepts are being worked on across a number of stores and the hope is to continue with an expansion strategy.

According to Business Insider, analysts at Bernstein have put together a comeback strategy for Amazon in grocery and the main component is purchasing existing stores that are on the chopping block due to the proposed Kroger, Albertsons merger. The grocers are expected to shed up to 500 stores, and many are in areas that could be favorable for Amazon. The price to acquire is another selling point. Bernstein analysts also are proposing that Amazon quickly rebrand stores or focus on stores in targeted regions. 

However, the waters continue to be rough. As noted earlier, Amazon has put a pause on constructing or opening brick-and-mortar grocery stores, and in Minneapolis the company announced it will be sub-leasing space that was originally marked as Amazon Fresh or Amazon Go stores. In addition, Whole Foods announced layoffs in April while Amazon restructures the organization.

So where exactly is Amazon heading with its grocery initiative? Supermarket News Senior Editor Bill Wilson talked to Jennifer Bartashus, senior analyst, Retail Staples and Packaged Food, for Bloomberg Intelligence about the road that lies ahead for Amazon grocery.

Take a listen.

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