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Competing Retailers Level Restrictions on Amazon and Whole Foods

Competing Retailers Level Restrictions on Amazon and Whole Foods


SEATTLE, WA
Tuesday, October 24th, 2017

Widespread efforts to limit the scope and services that Amazon and its recently-acquired Whole Foods banner can introduce in-store may be underway, according to a recent Reuters report. The news source notes that large retailers such as Target are taking advantage of legal provisions in leases and on a local level to stop Whole Foods from introducing new services.

Amazon

Targeted services include Amazon lockers and delivery services intended to capitalize on Amazon’s market share, drive sales and growth, and bring new customers to Whole Foods locations. Reuters cites interviews and documents that reveal bans on Amazon lockers and delivery operations at Whole Foods locations near Target and Lidl stores—and even stores in other industries that rival Amazon, stores including Best Buy and Bed Bath & Beyond.

“Across the United States, large retailers including Target…have legal rights in many lease agreements that allow them to limit what Amazon can do with nearby Whole Foods stores, and where it can open new ones,” the news source reported.

While Reuters noted that, because many of these deals and documents are private and confidential, the news source could not reveal the extent to which rival companies and even, in some cases, local municipalities have worked to restrict Amazon’s brick-and-mortar efforts, these restrictions appear to be widespread.

Whole Foods Storefront

The report details a 16-page memo obtained from Miami, Florida’s Pinecrest Place mall; in the report, Target required an affiliate of national landlord Regency Centers Corp to ban "lockers, lock-boxes, or other type of storage system that is used to receive or store merchandise from a catalog or online retailer." The report issues many more restrictions, too, apparently aimed at stymieing Amazon’s collaboration with Whole Foods, including a provision which bars mall tenants from operating "a fulfillment center in connection with receiving, storing or distributing merchandise from a catalog or online retailer."

Discount grocer Lidl recently included similar verbiage in its own lease agreement to "prohibit the operation of pickup facilities" near a proposed Lidl site in Long Island, New York.

Target issued a statement to the news source, noting that the chain is "focused on what's best for the company and delivering on the reasons our guests love Target. Our more than 1,800 stores across the country are a strategic asset and a vital part of Target's future."

Could these impasses prevent Amazon and Whole Foods from taking full advantage of their partnership? Deli Market News will continue to report.

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