Amazon CEO Andy Jassy has admitted that the US retail giant still hasn’t nailed down a successful model when it comes to the grocery sector.
The company has paused expansion of its Fresh supermarkets and cashier-less convenience stores until it finds the right recipe for success, Jassy said in a rare appearance on the company’s quarterly results call on Thursday.
Despite Jassy’s comments, two new stores were opened in Croydon and Monument last month.
Jassy admitted that what Amazon needs is to find a distinctive store format that performs well financially before embarking on a major expansion, a formula it hopes to find this year.
Amazon has long viewed grocery as a key to unlock more consumer spending within its ecosystem.
Subscribe to Charged Retail for free
Despite Amazon’s large business from packaged food and other goods, it has yet to win significant market share in perishables, Jassy admitted
Wedbush Securities analyst Michael Pachter told Reuters: “Retail is a tough business. They are flushing money down a toilet pursuing Amazon Fresh stores and thinking they can brand a new concept and capture share from retailers who have been successful for decades.”
Jassy said the future of grocery was both online and offline.
He went on to praise its Whole Foods subsidiary for its growth and said it remains on top for premium, organic grocery offerings, however its mass-appeal still needed work.