The infrastructure of Amazon Fresh, the Seattle-based juggernaut’s foray into the conventional food retail mode, is taking shape. In recent months, we have reported about locations in the Mid-Atlantic where Amazon Fresh will open stores. Those new units are clustered in three major metropolitan markets – Metro New York, Philadelphia and Washington, DC.
Now comes word, too, of a recently signed distribution center deal involving wholesaler SpartanNash in Severn, MD. That full-service warehouse is expected to supply Amazon Fresh units with grocery items in the Mid-Atlantic and other future locations in the Northeast. Earlier this month, Amazon and SpartanNash inked an agreement that would allow the Jeff Bezos-controlled company to acquire stock in the Grand Rapids, MI-based distributor.
In Metro New York, Amazon Fresh is expected to open stores in Woodland Park and Paramus, NJ (both former Fairway units) next year. In the Philadelphia area, Amazon Fresh will lease space for new stores expected to open next year in Bensalem, PA, Warrington, PA and a recently announced location on 5th and Spring Garden Streets in the Northern Liberties section of the city. That store is projected for a 2022 opening; the other two units should open next year. In the DC area, Amazon Fresh plans to open stores Fairfax and Franconia, VA, Chevy Chase, MD and at another recently announced site in Gaithersburg, MD. Those stores should open in 2021. All stores will range between 30,000 and 40,000 square feet and if you can judge by the big merchant’s one store that has opened in Woodland Hills, CA, the emphasis in the new Amazon Fresh units will be on perishables and technology with all sites in demographically favorable locations.
As for the distribution center lease that SpartanNash signed in Severn, MD, there’s some background to report that leads observers to believe that the new facility (which would be SpartanNash’s only non-military warehouse in the region) will be used as an Amazon Fresh dedicated depot.
In an SEC filing in early October, publicly-held SpartanNash issued a warrant allowing Amazon to acquire as much as 5.44 million common shares, which would represent about 15 percent of SpartanNash’s outstanding common shares. For its potential $96.4 million investment, SpartanNash will continue and further reinforce a relationship with Amazon that began in 2016 to help support Amazon’s then-fledgling grocery online delivery.
Ten days later, commercial real estate developer Provender Partners issued a release stating that SpartanNash has leased 365,000 square feet of distribution space in Severn, MD at one of the company’s properties. That space, formerly occupied by US Foodservice, is a full-service DC – grocery, frozen and refrigerated. Total lease consideration for the seven-year deal is $25.8 million. While there has been no acknowledgement about a grocery supply connection from either company, the linkage evidence is hard to ignore.
While continuing to seek new locations for its Amazon Fresh stores (and also for its Amazon Go convenience stores), the Seattle-based powerhouse is continuing to add more fulfillment centers of its own. A new distribution center is currently under construction in Bristol Township, PA (149,000 square feet). Also in Falls Township, PA, about six miles from Bristol Township, Amazon is expected to sign a lease for the 396,000 square foot former Rite Aid DC. Amazon also plans to build a 55,742 square foot warehouse at a former Waldbaum’s store in Carle Place, NY. That depot, which has gained Town of Hempstead approval, is expected to deliver products to Long Island consumers that are delivered from Amazon’s 855,000 square foot fulfillment center on State Island (with an additional 450,000 square feet to be added).