Dive Brief:

• Amazon Fresh opened its 10th location on Thursday in Fullerton, California, according to a press release. 

• The 45,000-square-foot store, located at 1100 S. Harbor Blvd., opens with an assortment of mainstream, local and private label grocery items along with prepared foods. Deals include 15-cent bananas, pizza slices for $1.79 and rotisserie chickens for $4.97.

• This marks Amazon Fresh’s seventh store in California following recent openings in Whittier and North Hollywood. The brand also has three locations in the Chicago area.

Dive Insight:

Amazon Fresh has reached the 10-store milestone in just over five months with many more locations on the way.

Early openings have focused on Southern California and Chicagoland, and reports indicate more stores are in the pipeline for these markets. Amazon has also confirmed it will open stores in its hometown of Seattle as well as in New Jersey, while local news outlets have reported stores in the works in Minnesota's Twin Cities area, Florida, Philadelphia and the Washington, D.C. area. 

Research from R5 Capital shows Amazon is readying at least 100 store openings in the coming months, and the firm said in a recent note the company is on track to eventually operate more than 1,000 Fresh stores nationwide.

Amazon Fresh’s Fullerton store has many of the features typical of its other stores, including an assortment of mainstream brands like Coca-Cola and Kraft as well as private label and local brands, and deals on a wide range of products to spur interest, including $4.89-per-pound USDA Choice short ribs and $1.99-per-pound seedless grapes.

Experts note the dominant factors in siting Amazon Fresh stores appear to be the density of Prime members and the availability of locations vacated by distressed retailers like Toys "R" Us, which formerly occupied the Fullerton site. This places Amazon Fresh stores in busy trade areas, sometimes in the same retail complex as its direct competitors. The Fullerton location sits right across the street from a Costco and just a block away from a Sprouts Farmers Market. An apparent Amazon Fresh site in Bellevue, Washington, sits caddy-corner from a Target and across the street from a Kroger-owned QFC store.

Some observers have discounted Amazon Fresh stores as too conventional and unremarkable aside from the integration of the Dash Cart for quickly checking out small orders. R5 summed up its visit to a Chicago area store as “uninspiring,” noting a missed opportunity for Amazon to use its near-limitless capital to reimagine the traditional grocery store. But Bill Bishop, chief architect at consulting firm Brick Meets Click, says the stores are built primarily with efficiency and omnichannel demand in mind. The idea, he said, is to stay above the fray as grocers spend more and more to compete and ramp up online operations.

“They're really in this market, to be able to out-survive the vast majority of other retailers,” Bishop said in a recent interview.

Amazon Fresh is also showing an ability to operate in a variety of formats as well as both urban and suburban markets. While most of its active stores occupy former retail sites, it recently opened a store on the ground floor of a new mixed-use development in North Hollywood, California. Another site in Seattle's Central District follows a similar plan, and will also feature small retail pop-up booths just outside the store.