Dive Brief:
- An Amazon Go store in San Francisco’s Financial District is planning to add hot food, espresso and fountain soda in the next few months, according to the San Francisco Chronicle. An email to customers noted that the store is closed for renovations and will open back up in the spring with "new features and flavors."
- Adding hot foods, soda fountain and espresso requires additional permits from the city. Amazon filed for review by the city's department of health on Jan. 21.
- On its website, Amazon also lists one of its Chicago Go locations as currently closed for renovations.
Dive Insight:
As grocery retailers continue to add hot food bars and in-store restaurants to lure in hungry shoppers, Amazon doesn't want to be left behind. Although its Go stores have gained a following for their grab-and-go selections, offering plates of customizable, freshly prepared meal options promises to drive additional traffic.
But getting hot food right poses considerable challenges. It requires additional service staff and regular upkeep, which goes against the labor savings and uncluttered store atmosphere Amazon Go is trying to achieve. It's also unclear how exactly shoppers will pay for weighted items and fountain beverages, and if that process will be as quick and seamless as customers expect.
Many of Amazon Go’s convenience-store competitors have stepped up their hot food offerings in recent years, while supermarkets have grown increasingly sophisticated with their foodservice operations, offering everything from fresh sushi to brick oven pizza to go along with their salad selections and hot dishes.
According to The Food Industry Association, grocery prepared foods bring in $12.7 billion annually and have a 94% household penetration.
Additional Amazon Go stores are expected to open soon, including one in Seattle’s Capitol Hill neighborhood that, according to plans filed with the city, will have a section where shoppers can sit and eat. The store, which at 10,400 square feet will become Amazon's largest Go location, was originally supposed to be supermarket-style format with a seafood and meat department, cheesemonger and produce section.
Bloomberg recently reported that Amazon has reignited its plan to open larger, supermarket-style Go locations in addition to its smaller locations. Amazon Go operates more than two dozen stores in four cities and reportedly plans to open hundreds of additional locations. It also plans to license its technology to outside companies, according to Bloomberg.
Amazon Go opened as a just-walk-out, app-based payment store. But it now accepts cash in Chicago, Seattle, San Francisco, which banned cashless stores last year, and began accepting cash in May in New York City, where the city council recently passed a similar ban.
