It was fortuitous that I flew out of the American Airlines terminal at LaGuardia Airport in New York City over the weekend and noticed something—Amazon’s Just Walk Out technology.
I immediately heard the voice of Star Wars character Obi-Wan Kenobi as portrayed by the late Sir Alec Guinness: “Now that’s a name I have not heard in a long time.”
It turns out that the WH Smith convenience store was the first non-Amazon retailer to employ the cashierless technology in late 2022. Less than two years later, Amazon would announce it was pulling the plug on Just Walk Out tech—for its own stores at least.
In April 2024, the online retail giant and wannabe grocery titan said it would still sell the tech to other retailers, but Just Walk Out didn’t make sense for its own brick-and-mortar locations.
I wanted to try it out, so I stepped past the turnstyle-type security gates after entering my credit card information. The one employee at the store, who seemed to be more of a guard than a retail clerk, was busy assuring another customer that it was OK to leave without running their purchases through a kiosk.
The fortuitous part came a couple of days later, when Amazon CEO Andy Jassy was making his own assurances to investors.
Amazon held its investor day with shareholders on Wednesday, and Jassy doubled down on his bullishness for the grocery portion of its business, which remains a fraction of the overall Amazon universe.
Amazon went so far as to put out a press release on Thursday where Jassy declared in the first sentence: “I am very bullish about grocery.”
Jassy went on to note that even excluding Amazon Fresh and Whole Foods Market stores, the company made over $100 billion in gross sales on grocery products last year alone. That ain’t nothin’, but the company still has a long way to go before it dethrones Walmart as the U.S. grocery giant.
Footnote: Jassy did not specify whether this was in the U.S. or its entire global sales on canned goods, pharmaceuticals and other packaged items.
Amazon CEO Andy Jassy at the company's annual investor day event. Photo provided by Amazon
He touted Amazon’s new small-format Whole Foods stores in New York City that aim to give convenience stores and grocers a run for their money in the Big Apple, but it was Jassy’s comments about perishables that caught my attention.
“We know if we want to serve as many customers as we want, we need to have a broader, mass perishables offering. And we have several efforts here,” Jassy said in the press release.
That means Amazon is moving forward with Amazon Fresh 2.0. It’s a welcome change from the retailer’s lackluster initial attempt with the banner just a few years ago.
Supermarket News Managing Editor Heather Lalley described the Amazon Fresh store in Norridge, Illinois, as “a soulless shopping experience.”
“It’s quiet. And sterile. And the thousands of cameras hanging overhead give it an off-putting, Big Brother vibe,” she wrote in 2023.
Amazon did a reboot on the Norridge store in late 2024, along with several others in metro Chicago and Los Angeles, giving them a more welcoming vibe with design elements like you’d see in a Whole Foods.
Jassy said the new-and-improved Amazon Fresh stores are “showing meaningful progress in terms of what the performance looks like versus the first version of those Fresh stores,” the retailer is “experimenting with a number of other concepts that we think have promise.”
That could mean that while Amazon Fresh is starting to look more like Whole Foods, conversely, Whole Foods could also start looking more like Amazon Fresh.
Supermarket News got a first glimpse of one of these experiments in October, when Amazon opened its first Amazon Grocery store in downtown Chicago.
The small-format store was opened downstairs from a Whole Foods Market, carrying 3,500 SKUs of name-brand products like Coca-Cola, Fritos, and Folgers coffee.
I can’t help but wonder what Whole Foods Market founder John Mackey thinks of this merging of his health-conscious concept with typical junk foods you could purchase at a gas station.
“Customers shopping at Whole Foods Market today are looking for natural and organic products. However, we know that many of them also visit additional stores to grab their favorite national grocery brands or household essentials to complete their weekly shop,” Amazon said in a prepared statement in October.
Does the future Whole Foods include an aisle for unhealthy products? Maybe.
Jassy revealed on Wednesday that Whole Foods could soon experiment with “a store within a store” concept with products “that maybe Whole Foods Market doesn't supply, but that a lot of families want to shop when they do their weekly grocery shopping.”
Enter Darth Vadar’s theme song. Is it the end of Whole Foods as we know it? Where you can be certain that its products are free of what many consider dangerous additives?
Whole Foods is also testing micro-fulfillment capabilities, according to Jassy. Stay tuned on that one.
The micro-fulfillment centers also would serve the dual purpose of getting orders out faster, Jassy said.
“And then an offering that I would say we have seen some very early success on, that's very promising, which is we have these same day facilities that we fulfill millions of SKUs out of for our retail business, typically same day,” he noted.
Those quick orders are already being tested in Phoenix, Kansas City, and Orlando, Jassy said.
Amazon's micro-fulfillment concept. Graphic provided by Amazon
“And so now, when you're getting those items that you get same day, you can add perishables, like eggs or milk, or bread, or yogurt. That experience is really resonating with customers. We're seeing very significant adoption, and I'm optimistic as we roll that out to many more of our same day facilities, that that will lead to more of our customers buying perishables from us,” Jassy noted.
What does it all mean for the industry? It likely equates to some more two-steps-forward-one-step-back plays by the retail juggernaut, but it also could lead to more innovation that challenges the status quo.
As far as their Just Walk Out tech goes, I personally like the idea of not having to talk to anyone or break stride while making my way through a store. Please bring this back, Amazon, or at least sell it to the rest of your competitors.
Full disclosure: I purchased a bag of cheddar-flavored Chex Mix and a king-sized pack of Reese’s Big Cup stuffed with Reese’s Pieces. Don’t judge me.
Grocery Tech Basket is the Supermarket News column from Tech Editor Timothy Inklebarger, exploring the biggest developments in grocery technology.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.