The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
Amazon Fresh — once a worrisome growing competitor to traditional grocers — has yet another concerning indicator about the chain’s profitability and performance.
The Washington Post reported this week that Amazon Fresh laid off “hundreds” of its store workers, affecting “zone leads” who manage sections of individual stores, as part of what the company described as a cost-reduction plan, according to three anonymous former employees.
Amazon spokesperson Jessica Martin told the paper that the company is evaluating Amazon Fresh’s performance: “As a result, we’ve decided to evolve our in-store staffing and operations model to better serve our customers and teams. We remain committed to our grocery business, and we’re working closely with affected employees to help them find new shifts or roles within Amazon.”
While Amazon has leaned into its cutting-edge in-store technology — smart carts! Just Walk Out! — to help differentiate the chain with a focus on convenience for consumers, two workers told The Washington Post that the digital offerings are more of a burden than an aid. Even with frequent sales, such as recent Prime Day deals, Amazon Fresh has had trouble attracting in-store shoppers, the former employees told the paper.
Amazon has 44 stores across eight states and Washington, D.C.
At the start of this year, Amazon executives said the retailer giant has halted the rollout of Amazon Fresh as the company figures out how to better differentiate them and improve their economics.
Amazon is leaving zombie storefronts for planned Amazon Fresh locations. News reports in May said Amazon is backing out of at least half of a dozen planned Amazon Fresh Twin Cities stores, with six previously soon-to-open storefronts made available for sublease by Mid-America Real Estate’s Twin Cities office. Retail operators and landlords in the Philadelphia area, South Florida and a Seattle suburb have hit Amazon with lease-breach lawsuits this spring and summer.
It’s unclear what the future holds for the chain, but right now it doesn’t look especially bright.
In case you missed it
Kowalski’s Markets’ unionized workers announce three-day strike
United Food and Commercial Workers Local 663 announced Tuesday its intentions to hold an Unfair Labor Practice (ULP) strike at six Kowalski’s Markets from Aug. 4-6, according to the UFCW Local 663 website. The local union represents more than 600 of the chain’s grocery workers in the Minneapolis area, and the strikes will take place across stores in the city’s west metro area.
Local 663 members voted on July 24 to authorize the union’s bargaining committee members to call for the strike. The union has filed ULP charges again Kowalski’s for “intimidation of its employees who were exercising their rights to participate in protected concerted activity, interfering with concerted union activity, illegal surveillance of union activity, and bargaining in bad faith,” according to the announcement.
Foodland launches retail media arm with CitrusAd
Hawaii’s largest grocery chain has teamed up with CitrusAd to launch its first-ever retail media network, according to a Thursday press release. The retail media network melds together Foodland’s first-party data and CitrusAd’s algorithm to match brand compatibility with shopper history. With the platform, large and local brands will be able to interact with Foodland’s customers and improve return on ad spend, per the announcement.
The partnership also adds Foodland to the retail media company’s GroceryOne hub, which aims to make it simpler for brands to manage multiple retail media campaigns.
Wegmans to soon open doors at first Manhattan storefront
The store is scheduled to open on Oct. 18 at 770 Broadway, according to a Thursday announcement. The grocer announced its plans for the location in July 2021.
Along with the restaurant offerings and prepared foods, such as sushi, soups and pizza that Wegmans is known for, the store will also include a Sushi Bar and Champagne-Oyster Bar at the location’s onsite dining room.
Number of the week: 14%
That’s roughly the sales increase that Aldi saw for its cottage cheese during a viral TikTok trend, the discounter said earlier this week when announcing the fan-favorite products so far this year.
After linking with DoorDash earlier this year, Aldi is offering DoorDash delivery of the Fan Favorite winners, which include 13 items such as avocados, Kirkwood fresh chicken, Clancy’s kettle chips and Friendly Farms low sugar Greek yogurt. The discounter said that dairy was the dark horse winner of this year’s fan favorites.
What’s ahead
Earnings galore
Sprouts Farmers Market will announce its financial results for the second quarter after the market closes on Tuesday. Natural Grocers will report its third-quarter results after the market closes on Thursday. The impact of inflation on their bottom lines will likely be a hot topic for both specialty grocers to address with investors.
Latest jobs report
The U.S. Bureau of Labor Statistics is set to release its latest employment report next Friday, giving new insight into the grocery industry workforce during the month of July.
Impulse Find
Late Night Grocery with Hy-Vee
Hy-Vee showed off a “guest employee” — David Letterman, former host of Late Night — on its Facebook page last week. Letterman was pictured wearing the grocer’s branded apron as well as a personalized name tag.
In a video on his Instagram, Letterman is seen stocking, sorting and even snacking on uncooked Campbell’s soup with fellow employees who call him “captain.” Letterman also jumps onto the loudspeaker to announce that “today only, celery for Hy-Vee shoppers is free.”
