May 9, 2023 - Business

Amazon pulls out of Fresh grocery stores in the Twin Cities

An empty Amazon Fresh store

Amazon's empty Eagan store. Photo: Nick Halter/Axios

Amazon's plan to enter the Twin Cities grocery store market with its Fresh brand appears dead.

The latest: The company has put six properties where it had been planning to open stores up for sublease.

Why it matters: A couple years ago, it looked like Amazon was ready to make a splash in the competitive Twin Cities grocery market. But it has re-thought its retail strategy nationwide and won't make a go of it in Minnesota.

Details: Axios has previously confirmed that Amazon was planning — and had built out — stores in Eagan, Eden Prairie, Arden Hills, Lakeville, Coon Rapids and Burnsville. But it paused those plans last year.

  • All six of the stores are now being marketed for sublease by Mid-America Real Estate's Twin Cities office.
  • Mid-America declined to comment on the listings.

Of note: Amazon has never confirmed its plans for the Twin Cities, though in the case of the Burnsville store, its name was on public building permits.

  • The company declined to comment on the subleases, but pointed to remarks CEO Andy Jassy made during a February earnings call in which he said Amazon would halt expansion of its Fresh stores as it experiments in the few dozen stores it has already opened in order to "find a format that we think resonates with customers."
  • An Amazon executive said during the call that it would exit certain stores with "low growth potential."

What they're saying: Amazon's pullout leaves half a dozen 40,000-square-foot stores empty.

  • They should be in high demand thanks to being in good locations, Lee Krueger, president of Krueger Real Estate Advisors, told Axios.
  • "This is probably more of a reflection on Amazon and their plans than it is on the (Twin Cities) market," said Krueger, who is not involved with the Amazon subleases.
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