Food Trade News

Amazon will soon be making its grocery store presence known in the Washington DC area with as many as three new supermarkets and two other “Go” convenience stores. Food World confirmed in June that the internet juggernaut would be opening full-fledged supermarkets in Fairfax, VA; Franconia/Manchester Lakes, VA; and in the Friendship Heights area of Chevy Chase, MD. In a recent article, the Washington Business Journal (WBJ) also noted Amazon’s future intent to open supermarkets in those locations and provided more detail about the Seattle-based company’s plans.

The Fairfax location was originally intended to open as a “365” unit, Whole Foods Market’s (WFM) scaled down version of a discount store that was to be a tenant in the new Point 50 shopping center. When Amazon acquired WFM in June 2017, it scrapped the 365 concept in its entirety. A few of those locations nationally became conventional Whole Foods stores, while a few scheduled stores that were still unbuilt were in limbo. Now a beer and wine permit sign has been posted on the window of the 30,000 square foot store on Fairfax Boulevard indicating Amazon’s likely intent to open one of its new and yet unnamed supermarket-type formats.

The Franconia/Manchester Lakes location was once a Shoppers Food Warehouse that closed in February 2020. Amazon plans to occupy about 31,000 square feet of space (about 50 percent of the original footprint). According to WBJ, plumbing, gas and electrical permits for the shopping center list the project as “Mendel’s Market,” a code name for Amazon’s physical retail projects that appears in some job ads, contracting leads and Amazon employee LinkedIn profiles.

The story also notes that “Mendel’s Grocery,” also appears in renovation documents for a 33,000-square-foot former Giant store at 5463 Wisconsin Avenue in Chevy Chase, MD. Giant closed that store in January 2020.

No opening dates for these locations have been announced. Currently, there is only one Amazon grocery store that is open – its planned original unit in Woodland Hills, CA. But that unit, which opened in March, has been operating as a “dark store,” serving Internet orders since its debut.

Amazon is also working on two other Washington, DC units that are likely to open  as “Go” convenience stores – an 8,000-square-foot location at 1701 14th Street NW at the “Liz” luxury apartments, and a 12,700-square-foot c-store at 901 H Street NE. Amazon now operates 26 “Go” units (five are temporarily closed) in four cities – Chicago, New York, San Francisco and Seattle.

Moreover, Amazon has been quietly adding real estate for planned supermarket openings in the Philadelphia market (Warrington, PA and Bensalem, PA); Northern New Jersey (Woodland Park, NJ and Paramus, NJ which were both acquired at auction from Fairway Market); as well as locations in Schaumburg, IL and Irvine, CA.

By next month, Giant Food will have completed a significant expansion to its fresh distribution center based in Jessup, MD. The 413,000 square foot perishables facility, which first opened in 2003, will be expanded by 23 percent, giving the Landover, MD unit of Ahold Delhaize USA (ADUSA) 95,000 square feet of additional space for its growing perishables departments. Project construction began in January 2020 and the new expanded facility is expected to add 30 new jobs.

“Beyond the additional space, the expansion will be extremely beneficial in terms of flexibility, giving us over 10,000 additional pallets and increased option to help expand our cross-docking capabilities, too,” said Ira Kress, president of the 163-store division.

Other departments that will benefit from the expansion include organics, fresh produce, meat and seafood as well as other merchandise including fresh cut floral and seasonal products.

“The efficiency improvements and enhanced space for housing and distributing thousands of items at the warehouse will further our ability to grow to meet the needs of our communities,” said Joe Urban, VP-distribution operations at Giant. “We’re committed to continuing to innovate our operations to bring the highest quality of products to our shoppers.”

The expansion of cross-docking capabilities will allow Giant to more efficiently transition items from inbound to outbound in one trip for key products.

The facility will now house 106 dock doors, nearly a 20 percent increase, to further streamline day-to-day operations. The expanded and upgraded distribution center will also improve traffic flow and warehousing efficiencies while also enhancing productivity and augmenting Giant’s safety operating practices.

Furthering omnichannel growth and capabilities, the warehouse will also supply product for Giant’s home delivery service, Giant Delivers, which is available to shoppers through the brand’s e-commerce shopping experience on giantfood.com. In the last two months, Giant has integrated its online platform with peapod.com.

Asked if the Jessup depot expansion is related to ADUSA’s recent decision to become a fully integrated self-distribution organization by 2023, Kress said that the Jessup project was unrelated, “but the expansion in Jessup will align well when all of the Ahold Delhaize USA brands are fully integrated in a self-supply system. Certainly, the expanded and improved Jessup facility offers a state-of-the-art DC that will fit well in our evolving distribution network.”

The end is near for bankrupt Fairway Group Holdings as the “like no other market” retailer has announced that it has sold two stores and plans to close its remaining four supermarkets.

At a U. S. Bankruptcy Court auction held late in the day on July 27, Bogopa Service Corporation was deemed the winner in its bid to acquire two Fairway Markets in the Red Hook section of Brooklyn and in Douglaston, Queens for $2.43 million. The stores will trade as Food Bazaars, bringing the number of Food Bazaars in the Metro New York market to 28. The Brooklyn-based regional chain will also assume Fairway’s existing union contract. Additionally, Bogopa will enter into a new lease agreement with the landlord at the Red Hook site, the O’Connell Organization.

Bogopa’s bid was recognized by the Bankruptcy Court as being to superior to another late offer submitted by brothers Paul and Pat (Pasquale) Conte (dba Seven Seas LLC), a Key Food member who operate eight stores in Manhattan and Brooklyn, including the former Fairway unit on Ralph Avenue in Brooklyn which it acquired from the Manhattan-based beleaguered retailer at the first auction which was held on March 25. That store now trades as a Food Way supermarket.

“These two new Food Bazaar locations will continue to provide the Douglaston and Red Hook communities with the highest quality and variety of perishables, groceries and other unique food offerings that our shoppers have come to expect. We are pleased to pass the baton to Food Bazaar, knowing they will welcome our employees to the Bogopa family and will deliver a world-class shopping experience for their customers,” said Fairway CEO Abel Porter in a statement.

Bogopa was no stranger to the Fairway bidding/auction process, either. After Fairway filed for Chapter 11 bankruptcy protection on January 22, 2020, Bogopa made an aggressive late play on March 12 to acquire Fairway’s five units in Manhattan, its store in Pelham Manor, NY, and the company’s production and distribution center (PDC) in the Bronx for $75 million.

At the auction held on March 25, Bogopa was assigned “back-up bidder” status after “stalking horse” bidder Village ShopRite “won” the auction, agreeing to pay $76.2 million for what ended up being four Manhattan sites (the Harlem store was not part of that deal but the adjacent parking lot was), the Pelham Manor location and the PDC.

Also at the original auction in late March, Amazon acquired the leases for Fairway’s two New Jersey stores – in Paramus and Woodland Park – for $1.5 million. Those two units are expected to reopen early next year as conventional grocery stores under Amazon’s yet unnamed new supermarket format.

As for Fairway’s other four stores – Stamford, CT; Harlem, NY; Plainview, NY; and Westbury, NY – only the latter store remains open and is expected to close next month.

The acquisition of the Red Hook and Douglaston stores along with the subsequent store closings will essentially end the once great legacy of Fairway Market which was founded by the Glickberg family in 1933.

Despite its once iconic image, Fairway Market will soon be a memory. Its 14 stores (at the time of its bankruptcy filing) will have sold for less than $86 million.