Amazon Fresh Expands on Long Island with Two New Store Openings
Amazon is continuing its push into the grocery sector with plans to open two new Amazon Fresh locations on Long Island, adding to the highly competitive grocery market. The new stores in Plainview and East Setauket are set to join the existing Amazon Fresh in Oceanside, which opened in July 2022 and is currently the only operating Amazon Fresh in New York State.
Both new locations, which have been in development for over a year, are actively hiring and have been outfitted with Amazon Fresh’s signature gray and light green design. Amazon has also applied for liquor licenses for both stores, receiving temporary retail permits to begin alcohol sales, marking a strategic move to offer a broader product selection and enhance the shopping experience.
Amazon Fresh: The Struggles and Strategic Revamps of a Grocery Giant in the Making
Amazon has been reshaping the retail landscape for decades, from revolutionizing e-commerce to venturing into cloud computing, but its foray into the grocery business has been anything but smooth. While the tech giant’s ambitions in the grocery sector have been clear since its acquisition of Whole Foods Market in 2017, the path to expanding Amazon Fresh has been full of trials, revamps, and setbacks.
A Slow Start and Legal Hurdles
Amazon Fresh’s journey began with much promise but quickly hit bumps along the road. The first store opened in Woodland Hills, California, in 2020, and by early 2023, Amazon had grown the chain to 44 stores across eight states and Washington, D.C. However, the company was not satisfied with the performance, prompting Amazon CEO Andy Jassy to pause new store openings to rethink the format.
This pause didn’t come without complications. Amazon faced lawsuits from retail landlords in cities like Philadelphia, Jersey City, and Sunrise, Florida, who accused the company of breaching contracts by delaying or canceling store openings. A notable case on Long Island involves Salisbury Partners LLC, which is suing Amazon for over $37 million, alleging breach of contract over a lease signed in East Meadow. Amazon is countersuing for $250,000, claiming it had the right to terminate the lease due to unapproved landlord plans.
Revamping the Amazon Fresh Experience
In response to these challenges, Amazon began implementing changes to its Amazon Fresh format in 2023, starting with store revamps in Schaumburg and Oak Lawn, Illinois. The updates included an expanded grocery selection and more competitive pricing, aiming to attract a wider customer base.
One of the most significant changes was Amazon’s decision to discontinue its Just Walk Out technology, which allowed customers to shop without scanning items or checking out. Instead, Amazon Fresh stores now feature Dash Carts—smart shopping carts equipped with screens that display running totals of purchases. Customers scan barcodes using cameras on the carts and exit through Dash Cart lanes linked to their Amazon accounts. Traditional checkout and self-checkout lanes have also been reintroduced, adding familiar options for customers.
These revamps have shown early positive results, with Jassy noting that performance has improved “meaningfully better in almost every dimension.” However, some setbacks remain, including the closure of three smaller Amazon Fresh stores in Seattle, Washington, D.C., and Arlington, Virginia.
Amazon Fresh Performance on Long Island: A Look at Oceanside
The only operating Amazon Fresh on Long Island, located in Oceanside, serves as a microcosm of the chain’s broader performance challenges and opportunities. According to data from Placer.ai, the Oceanside store had 559,480 visits and a visits per square foot rate of 10.13, positioning it as a mid-tier performer in the region. While the total visits are relatively high, the store’s visits per square foot lag significantly behind other major grocers, highlighting a critical efficiency gap.
For context, here’s how Oceanside Amazon Fresh compares to other top-performing grocery stores on Long Island:
- Trader Joe’s locations, such as the one ranked first in the dataset, exhibit 112.32 visits per square foot, showcasing their strong customer draw and efficient use of space. Another Trader Joe’s store recorded 78.70 visits per square foot, further emphasizing the brand’s dominance in foot traffic efficiency.
- Stop & Shop stores, including locations ranked in the top ten, have a varied but strong performance, with some stores attracting over 1 million visits annually. Stop & Shop’s visits per square foot rate ranges around the mid-20s, substantially outperforming Amazon Fresh in terms of customer density.
- Lidl, known for its competitive pricing, recorded 51.65 visits per square foot, positioning it as a highly efficient operator in comparison to Amazon Fresh’s more modest numbers.
- King Kullen, a long-established grocery chain on Long Island, generally sees a steady flow of customers, with a visits per square foot rate that, while not as high as Trader Joe’s or Lidl, still surpasses Amazon Fresh.
Competing in a Challenging Market
Despite Amazon’s overall 2023 revenue of $575 billion, its physical stores—including Whole Foods—only contributed 3.5% of that total. Whole Foods, with its 536 locations (517 in the U.S.), targets higher-earning shoppers and focuses on organic and natural foods, limiting its mass appeal. Amazon hopes Amazon Fresh will bridge this gap and reach a broader audience, but capturing significant market share remains a formidable challenge.
In the U.S. grocery market, Amazon’s presence still pales in comparison to industry leader Walmart. According to market research firm Numerator, Walmart held 21.4% of the market share in the second quarter of this year, while Amazon lagged far behind at 1.3%, ranking 17th overall. Groceries have lower profit margins than Amazon’s more lucrative cloud and advertising businesses, further complicating Amazon Fresh’s growth strategy.
Looking Ahead
The addition of the new Plainview and East Setauket locations on Long Island signals Amazon’s renewed commitment to expanding its grocery footprint despite the hurdles. The success of these stores will be critical as Amazon continues to adapt and refine the Amazon Fresh model to better meet consumer needs and compete in a crowded market.
The performance of the Oceanside store on Long Island serves as a critical benchmark, showing both the potential and the pitfalls that Amazon must address to succeed in this competitive field. As Amazon continues to navigate these challenges, its ability to adapt and innovate will be crucial in determining whether Amazon Fresh can eventually become a major player in the U.S. grocery market.
Source: Newsday, Placer.ai
Keywords: Supermarket, supermarket news, grocery news, grocery store news, grocery stores, amazon
#amazon #supermarketnews #supermarket #grocerystore #grocerynews #grocery #grocerychain