Landlord, Amazon sue each other over delayed Amazon Fresh location

Amazon delivers on a lot of items, but according to a landlord in Pennsylvania, the company is not delivering on a lease it signed for an Amazon Fresh store.

The plan was for an Amazon Fresh store to replace a Barnes & Noble in Willow Grove, Pa., but that opening has been delayed. Federal Realty Investment Trust LLC is now suing Amazon for a technical default on the lease due to the fact the Fresh store has not yet opened. Amazon, however, is not taking the charge lying down as it also has filed a countersuit alleging the landlord is at fault. Amazon is accusing the building owner of not completing work in order to make the transition. Amazon originally filed for a liquor license for the store in August 2022.

Amazon has targeted its grocery business as one area of growth in 2023, but the delivery giant is still trying to figure out the logistics. Many sites of future Amazon Fresh and Amazon Go stores are sitting dormant, including a few in the Philadelphia area not far from the Willow Grove location.

There has been talk of Amazon acquiring stores involved in the Kroger, Albertsons merger divestiture. Analysts at Wall Street firm Bernstein have put together a comeback strategy for the delivery giant — a strategy that includes purchasing divested stores via the proposed Kroger, Albertsons merger, according to reporting from Business Insider. Kroger and Albertsons are expected to divest up to 650 stores, many in areas that could be favorable for Amazon. The acquisition price could be another selling point. In addition to the strategy connected to the merger, Bernstein analysts are also proposing that Amazon quickly rebrand stores or focus on stores in targeted regions.

Related:Podcast: Amazon’s uphill battle in the grocery sector

Amazon CEO Andy Jassy has stressed the need to find a mass grocery format that is worth expanding broadly. He said a larger physical store footprint is needed because most of grocery shopping is still being conducted at brick-and-mortar locations.

Amazon, headquartered in San Francisco, does own Austin, Texas-based Whole Foods Market, which has not been immune to the Amazon grocery restructure. The grocer was expected to lay off hundreds of workers, according to a memo reported first by the Wall Street Journal.

“As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes,” the memo said. “With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores.”

Related:Amazon posts strong Q1 results; grocery still is key

Whole Foods will be decreasing its operating regions from nine to six and centralizing some units within its operations division. Category-specific store operations support will switch from a regional structure to a team within global operations. Supply chain management will now be within Whole Foods’ global supply chain division. Global support teams will receive further adjustments and the company’s team member services will be enhanced.

“We are confident these changes will allow us to better support our stores, team members, and suppliers, elevate the customer experience, and position Whole Foods for continued growth,” the company said.