Online retailer Amazon.com has long feared disrupting the grocery industry, but it believes it has already missed the mark.
In a rare appearance on the company’s quarterly earnings call on Thursday, Chief Executive Andy Jassy said the company had suspended its Fresh supermarkets and cashier-less stores until it found the right recipe for success. Expansion of employee convenience stores.
What the company needs is a unique store model that is financially sound before embarking on a major expansion, which Amazon hopes to find this year, he said.
The comments underscore that Amazon, which said a year ago it would close its bookstores to focus on grocery, has yet to dominate brick-and-mortar retail since its closely watched acquisition of Whole Foods in 2017. Amazon has long viewed the grocery store as a key to unlocking more consumer spending.
Competitors like Kroger and Walmart are still formidable competition. While Amazon has a large business in packaged food and other goods, it has yet to win significant market share in perishable products, Jassy said.
Michael Pachter, an analyst at Wedbush Securities, said Amazon is to blame, having lured consumers to online shopping decades ago.
“Retail is a tough business,” he said. “They’re flushing money down the toilet chasing Amazon Fresh” and think “they can build a new concept and take share from retailers that have been successful for decades.”
Jassy said the future of the grocery store is online and offline, or omni-channel.
Whole Foods is growing and remains a leader in premium organic groceries, but Amazon’s mass-appeal needs to improve, he said.
So far, the company has dozens of Amazon Fresh stores, Jassy said. It’s also experimenting with technology that would allow shoppers to buy items from stores and charge them without going through a cash register.
For now, the company has closed some grocery stores and written down certain assets. Its chief financial officer said the company spent $720 million (Rs 5,919 crore) from such actions in the fourth quarter.
© Thomson Reuters 2023