Amazon to Sublease Planned Fresh Stores in Minneapolis

Retailer appears to exit physical grocery business in Twin Cities as it rethinks the concept

5/8/2023

Amazon Forecasts Modest 4th-Quarter Growth Amazon Fresh

Reports emerged that Amazon put six planned Amazon Fresh locations up for sublease in the Twin Cities market.

Amazon seems to have hit the stop button on its brick-and-mortar presence in Minneapolis. According to local media reports, the retail company is subleasing six sites that were intended to be built out into full-scale Amazon Fresh stores.

The planned locations in communities across the Twin Cities didn’t reach completion. Although not officially confirmed by Amazon when under development, the storefronts at one point featured Amazon Fresh signage.

To date, the only Amazon Fresh banners in the Midwest are in Illinois. The retailer currently operates nine stores in the Chicago suburbs.

The news about the Minneapolis-area subleases comes after Amazon CEO Andy Jassy confirmed that the company is still pursuing a grocery business but taking the time to hone the concept for the most effective model. "We have a set of experiments and concepts that we are working on across the dozens of stores and are pretty optimistic that some may work and hopeful that over the next year we find that,” he said during the company’s quarterly earnings call in early May.

Reflecting the uncertain food retailing market, Amazon also began offering some of its Prime customers a $10 incentive to pick up their purchases at Whole Foods, Amazon Fresh or other retail partner locations instead of having items sent to their homes. A report by the Reuters news service indicated that the offer is likely a way for the company to cut delivery costs.

Even as it cuts expenses in some areas, the retail giant is enhancing offerings in other parts of its e-commerce business. Amazon announced this week that it is introducing a new immersive online shopping experience called Amazon Anywhere, through which customers can buy physical products while in mobile apps and games. The first launch is within an augmented reality game called Peridot.

Seattle-based Amazon is No. 2 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America. PG also named the company as one of its Retailers of the Century.