Dive Brief:

• Amazon announced Monday it plans to open two Seattle-area grocery stores in the coming months — one in the city's Central District and the other in Bellevue, Washington.
• The Amazon Fresh store in the Central District will appear on the ground floor of a recently built mixed-use development at 23rd Avenue South and South Jackson Street, developer Vulcan Real Estate confirmed. The Bellevue location, meanwhile, appears set to debut in a strip mall in the Factoria neighborhood. Both stores have begun hiring “hundreds” of full- and part-time positions, according to Amazon.
• The Seattle-area locations join an array of Fresh stores set to debut across the country, including additional confirmed sites in Southern California and the Chicago area. Reports have linked Amazon Fresh to numerous other markets, including New Jersey, Maryland, Florida and Philadelphia.

Dive Insight:

Amazon Fresh is getting ready to open in its hometown — an unsurprising development that gives the company the opportunity to keep a close watch over the key grocery property as it rolls out nationwide.

Although Amazon did not specify addresses for its two new Seattle area stores, the developer of the Central District site confirmed its location at 2301 S. Jackson Street, while a trip across Lake Washington to Factoria seemed to confirm that the Bellevue location will be at 3901 Factoria Square Mall SE. 

The Bellevue address has all of the hallmarks of the Amazon Fresh design, including the dark gray storefront trimmed with lime green and sheltered cart corrals dotting a spacious parking lot. It occupies a former Safeway site in The Marketplace at Factoria, a bustling strip mall that includes a Nordstrom Rack, Panera Bread, Old Navy, Walmart and Target. Across the street sits a Kroger-owned QFC store, while Interstate 90 access is less than a mile away.

The Central District location is a bit more of an outlier for the Fresh model to date. It sits on the ground floor of a recently developed apartment complex in a neighborhood that has few chain grocery stores. The building’s ground floor was boarded up along Jackson and 23rd on Monday, making it difficult to determine the store’s entrance and other features. Situated in front of the complex were several small buildings that property owner Vulcan said will be "micro-retail" markets for local vendors.

While Fresh locations so far have primarily opened in former retail locations in suburban neighborhoods, the Central District site follows a plan that promises to appeal to apartment developers hungry for grocery anchors. An Amazon Fresh location in North Hollywood, California, follows a similar model, located on the ground floor of the new Lankershim and Otsego apartments, in what was formerly slated to be a Whole Foods. 

The two Seattle area locations underscore a site flexibility not often discussed with Fresh. In addition to suburban neighborhoods and strip malls, the format also seems to be targeting urban areas where walking and mass transit are the primary modes of transportation to stores. It's the strategy that propelled Whole Foods' growth and also places stores in Prime member-dense areas with high online shopping demand.

The news of the upcoming stores comes just after Amazon earned the top ranking in Dunnhumby’s recent grocery index, eclipsing traditional favorites like H-E-B and Publix as the pandemic-fueled consumer demand continues for services the e-tailer excels at — namely, online shopping and quick store trips. The more than 10,000 consumers surveyed also noted the retailer offered fair prices on groceries.

But other reports have not been as kind to the new format. Analysts with R5 Capital Markets gave the newest Fresh store in Naperville, Illinois, a thumbs down in a recent note to clients.

"What was so underwhelming? Simply that there was little evidence that the standard grocery store had been rethought at all. Layout, merchandising and adjacencies were all pretty much standard fare for most, if not all, chains," the analysts noted, saying the store had a limited selection of local, specialty and private label products.

A report from Placer.ai tracking foot traffic to Amazon Fresh’s inaugural store found a high level of interest, including repeat visits, after opening in late summer followed by a sharp decline as the calendar moved into December. The tracking service noted a surge in COVID-19 cases may have kept shoppers from visiting. Shoppers may have also shifted to delivery or pickup service, both of which are supported by Fresh locations.