Gaithersburg Amazon Fresh store: "Go big," or go home?

A long-completed but yet-to-open Amazon Fresh store filled with empty shelves on Shady Grove Road has become the local poster child for a nationwide freeze on Amazon's expansion plans in the grocery sector. Amazon successfully opened Amazon Fresh stores in Friendship Heights and Chevy Chase Lake, but the 270 Center store on the border of Rockville and Gaithersburg has been frozen in time since the fall of 2022. Yesterday, Amazon CEO Andy Jassy offered the first update on the cloudy future of the retail giant's bricks-and-mortar grocery adventure to the Financial Times, and it was a vaguely positive one.

Empty shelves inside the completed-but-unopened
Shady Grove Amazon Fresh store

Amazon plans to "go big" on expansion of its physical grocery stores this year, Jassy said in an exclusive interview with the FT. He said the halt he ordered on the openings and leasing of new locations cost the company $720 million in Q4 of 2022, and blamed the problems that warranted the pause on the pandemic. He said that now "we're hopeful that in 2023 we have a format we want to go big on, on the physical side."

That sounds like we can expect the Shady Grove store to go forward this year, and that the hysterical forecasts of all Amazon Fresh stores closing will prove to have been premature. Surprisingly, Jassy sounded more bullish on bricks-and-mortar stores than on the company's Amazon Fresh online delivery service, saying "people want to actually touch and feel" the foods they are buying before making a purchase. The FT noted that Amazon founder Jeff Bezos had promised to remain engaged on the grocery push after stepping aside as CEO in 2021. It's likely Bezos wasn't too pleased to hear the company hesitate on a plan that was meant to facilitate major growth in Amazon's online same-day-delivery service, which is dependent upon having neighborhood hubs like the Amazon Fresh grocery stores function as warehouses.

Bezos has a home in Washington, D.C. You can be sure he is going to be monitoring the progress of a Shady Grove store that is practically right under his nose in Montgomery County.