Amazon is opening Fresh supermarkets after yearlong stall — but many locations remain vacant
Workers stock shelves at an Amazon Fresh grocery store in Seattle, Washington, US, on Thursday, May 2, 2024.
David Ryder | Bloomberg | Getty Images
On a humid afternoon in August, a few hundred shoppers lined up outside an Amazon Fresh supermarket in a Philadelphia suburb, eagerly awaiting the store’s grand opening. A person in a banana costume hyped up the crowd, while Amazon staffers handed out free samples of cold brew coffee.
The event was a long time coming. Since 2022, the Fresh store in Bensalem, Pennsylvania, looked ready to open. But month after month, it sat vacant, with Amazon’s familiar smile logo plastered on a sign overlooking an empty parking lot.
“I kept thinking it would open, but it didn’t,” Joe Knowles, Bensalem Township’s council president, told CNBC. “All of a sudden, bang, it was ready to go.”
The Bensalem store is one of a handful of new Fresh locations that Amazon has launched in recent months, the first new store openings since the company halted expansion of the franchise more than a year ago. Since June, Amazon has opened seven other stores in California, Illinois, Maryland, New Jersey and Virginia, with more locations expected this year and into next. The company said it’s also launching five redesigned stores in Illinois and California this week.
It’s the latest development in Amazon’s on-again, off-again effort to become a powerhouse in a market the company has been pursuing for 17 years, culminating with its $13.7 billion acquisition of Whole Foods in 2017, the company’s biggest deal ever. Amazon’s scattershot approach has at times been about expanding its “everything store” mission and at others has been focused on making high-end produce more affordable. In some cases, the markets have provided a testing ground for in-store technologies.
Through it all, Amazon in 2023 claimed just 1.4% of the U.S. grocery market, compared compared with Walmart at 23.6% and Kroger’s 10% share, according to Numerator data.
Fresh supermarkets are a piece of the portfolio, which also includes Go convenience stores and same-day delivery for Prime members. The company also launched an unlimited grocery delivery subscription in the U.S. earlier this year. On Tuesday, Amazon introduced a new grocery private label called Amazon Saver, which includes items like pancake syrup, deli meat and canned goods mostly priced under $5.
The Fresh chain made its debut during the early months of the Covid pandemic. Amazon opened the first such store in September 2020, in the Woodland Hills neighborhood of Los Angeles, with an eye toward offering cheaper prices than Whole Foods. The company added package drop-off counters, along with cashierless checkout lanes and voice-activated displays, allowing shoppers to ask Alexa for recipe ideas or help finding items.
Amazon would reach 46 Fresh locations worldwide by early 2022. But the expansion plans ran head first into CEO Andy Jassy’s efforts to rein in costs as rapidly changing macro conditions forced dramatic downsizing. Amazon instituted mass layoffs starting in 2022, and shuttered some of its newer, more unproven bets.
In February 2023, Jassy announced on a quarterly earnings call that Amazon planned to close some Fresh supermarkets and Go convenience stores. He also hit pause on further growth of its Fresh footprint until the company could identify a store format that resonated with shoppers and “where we like the economics,” Jassy said.
Krispy Kreme donuts
With headcount cuts largely in the rearview mirror, Amazon is back into investing mode and pouring resources into Fresh, opening new stores after refining the experience and testing out a redesigned format late last year in select California and Illinois locations. Jassy and Amazon Fresh leaders have acknowledged that in order to grow its already “very large” grocery business, the company needs a bigger brick-and-mortar footprint.
In 2022, just 11% of sales in the $1.6 trillion U.S. grocery market took place online. That’s far below the level of e-commerce penetration in other categories, such as consumer electronics, where 41% of purchases were made online, according to Jefferies data. Companies “need to have a physical presence to be big in grocery,” analysts from the bank wrote in a note in October.
As part of the Fresh store redesign, Amazon created a more colorful layout and added Krispy Kreme donut and coffee stalls. In April, the company said it would remove the cashierless checkout technology, called Just Walk Out, from its U.S. Fresh stores and Whole Foods markets in favor of computerized Dash Carts, which track and tally up items as customers shop.
Amazon told CNBC it’s seen increased purchasing and higher customer satisfaction scores at the redesigned locations. The company said it expects to selectively open new Fresh locations over time based on feedback from shoppers.
“We like the early results a lot,” Jassy said on the company’s first-quarter earnings call in April, referring to the revamped Fresh stores. “They’re really meaningfully better in almost every dimension. It’s still early, and there’s some things to work through, but we like what we’re seeing there.”
A woman uses a dash cart during her grocery-shopping at a Whole Foods store as Amazon launches smart shopping carts at Whole Foods stores in San Mateo, California, United States on February 25, 2024. The smart shopping cart makes grocery shopping quicker by allowing customers to scan products right into their cart as they shop and then skip the checkout line.
Tayfun Coskun | Anadolu | Getty Images
Still, at least 22 Fresh supermarkets across the country remain vacant or unopened even though construction is complete, according to interviews with city officials and local news reports.
Delayed openings or cancellations have triggered at least five lawsuits. Landlords in Pennsylvania, New Jersey, New York, Florida and Washington alleged the company breached its contract by terminating its lease, with some parties seeking tens of millions of dollars worth of damages. Amazon last year reached a settlement with property owners in Florida and Washington, according to court documents. Attorneys representing the property owners didn’t respond to requests for comment.
Amazon declined to comment on the status of the Fresh stores that remain unopened.
One store in limbo is in Rancho Mirage, California, a desert town about 30 minutes southeast of Palm Springs. Previously the location of a Stein Mart department store, the market is in a shopping center that also includes a Hobby Lobby, an Italian restaurant and a blood bank. Shoppers in the area can find a Whole Foods, Walmart, Trader Joe’s and Aldi all within a short drive.
Amazon began remodeling the store in 2021 and signage went up the following year. But “opening soon” signs are still plastered on the doors. The company has told Rancho Mirage officials and AlbaneseCormier, the owner of the shopping complex, that it expects the store to open in 2025, said Ted Weill, a city council member.
AlbaneseCormier didn’t respond to a request for comment.
Weill said there aren’t many companies that can afford to just let a building sit idle for years.
“Amazon has so much money that whether they’ve invested $10 million, $20 million, $30 million in the project and decide not to go forward, so be it,” Weill said. “That won’t be the criteria that holds them back from pulling out.”
More than 500 miles north of Rancho Mirage, in the Sacramento suburb of Roseville, Amazon recently opened the doors of a Fresh supermarket. The store was fully constructed by last summer.
Brent Thill, an analyst at Jefferies, took the two-hour drive to Roseville from the Bay Area with his 16-year-old son a week after the Fresh store opened last month. Thill said the supermarket had an “amazing” selection, though he described the overall vibe as “sterile.”
“You walk into the Amazon Fresh store in Roseville and it feels like you’re in a stainless steel wine cellar,” Thill said. “And the store doesn’t have any decorations, it’s just a giant building.”
Thill has a buy rating on Amazon stock, but he says in grocery the company is spending a lot of money to compete in “one of the lowest-margin businesses on the planet.” But he called it “one of the highest budget items in the pocketbook,” which is where it clearly fits into Amazon’s broader retail strategy.
“And if there’s synergies around Amazon returns, if they can make it more unique, then who knows which way it goes,” Thill said.
Nvidia CEO Jensen Huang waves to a crowd as he leaves the China International Supply Chain Expo (CISCE) in Beijing on July 17, 2025.
Jade Gao | Afp | Getty Images
Nvidia CEO Jensen Huang said there’s a “real possibility” the company brings its advanced Blackwell processor to China as he urges the U.S. government to open up access for American chipmakers.
He also predicted the artificial intelligence market in the world’s second-biggest economy will grow 50% next year.
“The opportunity for us to bring Blackwell to the China market is a real possibility,” Huang said on Wednesday in a call for Nvidia’s latest quarterly results. “We just have to keep advocating the importance of American tech companies to be able to lead and win the AI race, and help make the American tech stack the global standard.”
Huang personally visited the White House in July and August to secure export licenses for Nvidia’s current-generation chip for Chinese AI, called the H20. In August, the White House announced that President Donald Trump and Huang had struck a deal in which Nvidia would receive export licenses in exchange for 15% of China sales of the H20 going to the U.S. government.
After the meeting, Trump said he was open to making a deal for Blackwell chips, which is Nvidia’s latest AI technology that currently comprises the majority of its data center revenue.
Huang has said that it is better for Chinese AI developers to use Nvidia’s chips rather than force them to use homegrown Chinese options by preventing exports, which could incentivize the Chinese tech industry to catch up.
If Nvidia were to release a Blackwell chip in China, it could spur a large amount of sales as Chinese AI developers opt for the most powerful chips available. Nvidia would have to modify its Blackwell chips for the U.S. market to make them slower in certain aspects in order to comply with U.S. export regulations.
“The Blackwell is super-duper advanced. I wouldn’t make a deal with that,” Trump said in August, before adding that it was possible to make a deal for a “somewhat enhanced in a negative way” version of Blackwell.
Huang’s bullish comments on Wednesday come after the company reported second-quarter year-over-year revenue growth of 56% to $54 billion, despite not selling a single H20 chip to China during the quarter. Nvidia said it released $180 million in H20 inventory to a customer outside of China, which accounted for $650 million in sales.
Nvidia said it is not counting on any H20 sales in the October quarter as part of its forecast for $54 billion in revenue, but that the company could sell between $2 billion and $5 billion in H20 chips, depending on the geopolitical environment.
“If we had more orders, we can build more,” Nvidia finance chief Colette Kress said on the call with analysts.
Nvidia said that while it had received some licenses after the meeting with Trump, the U.S. government has yet to publish official regulations outlining how its cut of sales will work.
“USG officials have expressed an expectation that the USG will receive 15% of the revenue generated from licensed H20 sales, but to date, the USG has not published a regulation codifying such requirement,” Kress said.
Huang told analysts that China is the second-largest AI market in the world.
“The China market I’ve estimated to be about $50 billion of opportunity for us this year, if we were able to address it with competitive products,” Huang said. “And if it’s $50 billion this year, you would expect it to grow, say, 50% per year.”
Recent reports have indicated that the Chinese government is encouraging AI developers to use homegrown chips over those from Nvidia.
“We’re still waiting on several of the geopolitical issues going back and forth between the governments and the companies trying to determine their purchases and what they want to do,” Kress said.
WATCH: Nvidia sales drop more than 4% as chipmaker says no Q2 H20 sales to China-based customers
Boonchai Wedmakawand | Moment | Getty Images
The founder of the company behind the IRL social media app was charged with defrauding investors of $170 million in the company’s 2021 funding round, the Department of Justice said Wednesday.
A federal grand jury in Oakland federal court indicted Abraham Shafi, 38 of Hawaii, with wire fraud, securities fraud and obstruction in connection with the scheme, the DOJ said.
Shafi was the CEO of Get Together, the parent company of IRL. The company was valued at $1 billion after its 2021 Series C funding round. IRL, which shuttered in June 2023, was a platform for users to organize events and offline activities. It found some traction in 2018, ranking among Apple’s top social apps.
Shafi allegedly spent millions on incentive advertising to boost installs of the app leading up to the Series C while maintaining to investors that the company spent “very little” on getting new users, the DOJ said.
He then concealed the expense by invoicing it to another firm, the DOJ said.
The indictment also alleges that the CEO and his fiancée used investor funds for “luxury hotel stays, luxury clothing, purchases from home furnishing retailers, thousands of dollars for art classes, and hundreds of thousands of dollars for SHAFI’s wedding, including payments for wedding guests’ airfare and luxury hotels.”
Shafi told CNBC in February 2018 that investors backed the company on its potential to compete with Facebook and Snapchat. Investors in IRL included Peter Thiel’s Founders Fund and the venture firm Floodgate.
Shafi’s co-founders at IRL included Scott Banister, the first board member of PayPal and an early investor in Facebook, among others.
Only Shafi was named in the DOJ indictment. He faces a max of 20 years in prison on each count, the DOJ said.
Last year, the Securities and Exchange Commission filed a civil lawsuit against Shafi for the same alleged scheme.
“Shafi took advantage of investors’ appetite for investments in the pre-IPO technology space and fraudulently raised approximately $170 million by lying about IRL’s business practices,” Monique Winkler, director of the SEC’s San Francisco Regional Office, said in a release at the time.
WATCH: Elon Musk asked Meta CEO Mark Zuckerberg to join xAI bid to buy OpenAI
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment11 months agoHere are the best electric bikes you can buy at every price level in October 2024