Amazon is looking for other tenants for some Amazon Fresh stores, and facing a lawsuit from a landlord at another, as new openings for the grocery chain slow down.
Six stores in the Minneapolis/St. Paul area and one outside Detroit have been listed for sublease through local real estate agents, according to Axios Twin Cities and Crain's Detroit Business, and Amazon reportedly has terminated the lease on a second metro Detroit site.
The locations are mostly in suburban areas, and some, such as one location in the Twin Cities, are located near other grocery stores, including a Walmart and regional chains such as Cub Foods and Hy-Vee, Winsight Grocery Business reported.
Amazon is also facing a lawsuit from its landlord at a planned Amazon Fresh location in Philadelphia, according to the Philadelphia Business Journal. Federal Realty Investment Trust is seeking $180,000 in rent and other expenses on a location in Willow Grove, a suburb north of the city. Amazon signed a lease for the location in April 2020, the Journal reported.
In October, Amazon told Federal that it planned "not to open all retail stores" that it had anticipated opening for 2023, Grocery Dive reported.
"Like any retailer, we periodically assess our portfolio of stores and make optimization decisions that can lead to closing existing locations or choosing not to pursue building a planned location," Jessica Martin, an Amazon spokesperson, told Insider.
Amazon has been slowing the pace of new Amazon Fresh store openings for the better part of a year. The company has decided to pause or pull the plug on some locations even after outfitting them with signage and other preparations for opening a store, the Information reported in December.
Brian Olsavsky, Amazon's CFO, said on an earnings call in February that the company is "continuously refining our store formats to find the ones that will resonate with customers, will build our grocery brand, and will allow us to scale meaningfully over time."
Building a grocery presence has been one of the top focuses for Amazon's retail business over the last several years. The effort got a boost in 2017 when the e-commerce giant paid $13.7 billion to acquire Whole Foods Market, and again in 2020, when it opened the first Amazon Fresh store.
"While we're pleased with the size and growth of our grocery business, we aspire to serve more of our customers' grocery needs than we do today," Amazon CEO Andy Jassy said in his letter to shareholders this year. "To do so, we need a broader physical store footprint given that most of the grocery shopping still happens in physical venues."
One analyst speculated that Amazon could buy hundreds of additional grocery stores from Kroger and Albertsons, which are planning to merge, to boost its store footprint.
Do you work at an Amazon Fresh store and have a story idea to share? Reach out to Alex Bitter at abitter@insider.com or via encrypted messaging app Signal at 808-854-4501.
