Amazon CEO Andy Jassy has doubled down on his prediction that the ecommerce giant will come up with a viable retail grocery format this year that it can roll out on a wide scale.
“We’re hopeful that in 2023, we have a format that we want to go big on, on the physical side,” Jassy said in an interview with the Financial Times.
He said Amazon was “still in the early stages” of its grocery concept development.
As previously reported, the company recently announced that it was pausing the expansion of its Amazon Fresh grocery stores and its Amazon Go convenience stores, and shuttering some locations while it works on tweaking the format.
In the interview with the Financial Times, Jassy said that the company had been hindered in its efforts to develop the stores by the fact that many of them opened during the pandemic.
“We haven’t had a lot of normalcy,” he said. “We’re experimenting with selection, checkout formats, assortment, price points. I’m encouraged we have several that I think are promising.”
Jassy and other Amazon executives also said during the company’s recent fourth-quarter earnings call that they remained optimistic about their prospects for operating physical grocery stores.
“We have a history of doing a lot of experimentation and doing it quickly,” Jassy told the Financial Times. “And then, when we find something that we like, doubling down on it, which is what we intend to do.”
Amazon’s 2017 acquisition of Whole Foods Market gave the company a massive national presence in bricks-and-mortar food retailing, but the company’s Amazon Fresh format was seen as a more mainstream option for consumers. Both Amazon Fresh and Amazon Go had been widely viewed as potential disruptors on the food-retail retail landscape, but so far neither concept has met expectations, the company said.
Amazon Fresh locations are similar to traditional supermarkets, with a strong focus on private labels and technology that allows customers to skip the checkout lines by scanning products as they shop using the company’s proprietary Dash Carts.
Amazon Go stores, meanwhile, are smaller convenience stores offering a limited assortment of grab-and-go items. They use Amazon’s own sophisticated sensor and camera system called Just Walk Out Technology that allows shoppers to shop and pay without scanning the products at all.
The company currently has 44 Amazon Fresh locations and 29 Amazon Go stores in the U.S., according to its website.
Sales in Amazon’s physical stores increased about 11.1% in 2022, to about $19 billion (not including orders placed online for pickup or delivery).