Amazon closes in on sites for Philadelphia-area grocery stores

Amazon closes in on sites for Philadelphia-area grocery stores Inc. is reportedly closing in on three Philadelphia locations for its new chain of grocery stores with two sites being eyed in Bucks County and at least one in Center City with the goal of opening them by the end of the year.

The Philadelphia region is competitive when it comes to vying for shoppers dollars and Amazon will be yet another grocery chain entering the mix. New chains, such as Lidl and Aldi, have been entering the market while existing retailers such as Giant Co. and Wawa have been adding locations and all looking to grab more of shopper’s weekly food budgets.

Amazon owns Whole Foods but has been experimenting with a grocery concept that is different from the organic grocery chain and unlike its Amazon Go, which is more like a convenience store with no cashier. The Amazon grocery will be more like a traditional grocery store. The Wall Street Journal reported in October that it had plans to open a dozen stores in the Los Angeles area and intended to launch other locations in Philadelphia and Chicago.

Two locations that Amazon (NASDAQ: AMZN) has reportedly zeroed in on locally are stores vacated by other retailers in Bucks County with a third in Center City, according to a Food Trade News report and sources familiar with the situation. One deal has Amazon leasing 36,000 square feet of a 49,000-square-foot former Giant at Creekview Center off Easton Road in Warrington. Another site is 41,000 square feet of a former Kmart at the Brookwood Shopping Center on Street Road in Bensalem, according to Food Trade News.

Amazon has been building out a warehouse distribution network throughout Philadelphia and leases an industrial building in Langhorne and is working on another deal in Bensalem.

At one point, Amazon had looked at a Tower Investments development on South Broad Street at Washington Avenue in Philadelphia but Giant ended up signing a lease at that site as well as another location with Tower at Columbus Boulevard along the Delaware River waterfront. Amazon is now scouring multiple sites in Center City, according to sources. A spokesperson from Amazon couldn’t be immediately reached for comment.

The entry of Amazon will further shake up a competitive market. Giant nudged out ShopRite in Philadelphia area, ringing in $2.75 billion in sales over 69 stores during the last year, according to Food Trade News’ latest annual ranking of top retailers that sell groceries, drugs and general merchandise. Sales from Giant stores accounted for 15.4% of the market share, the report said.

ShopRite had $2.64 billion in sales over the same period that ended March 31, 2020, and 14.8% of the market share across the Pennsylvania counties of Philadelphia, Bucks, Chester, Delaware and Montgomery and the South Jersey counties of Burlington, Camden and Gloucester. A year prior, ShopRite was the leader with $2.6 billion in sales, giving it 15.2% of the market compared with Giant’s then $2.56 billion in sales, or 15% of the market.

Acme Markets came in third with its 67 stores earning $1.5 billion in sales, then Wegmans with its nine stores bringing in $629 million in the eight-county area and Whole Foods fifth on the list with $416 million across 12 stores.

Both Lidl and Giant continue to expand in the city and across the region. Lidl opened its second store in Pennsylvania last September off Ridge Pike at Trooper Road in Lower Providence in Montgomery County. It opened its first store in Pennsylvania off McDade Boulevard in Folsom in late 2018.

Giant’s most notable expansion in the region has been in Philadelphia, where it has added four of its smaller format Heirloom stores.

Giant has had a presence in the suburbs for years and plans to open a new 50,000-square-foot store in Richboro next year. It has only recently started to expand into Philadelphia and intends to open its fourth Heirloom Market and a 65,000-square-foot regular store this year in Philadelphia. The company also intends to open a new grocery store on North Broad Street in the LVL North mixed-use project under development by Alterra Property Group, according to sources.

*Article courtesy of Philadelphia Business Journal, Natalie Kostelni

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