Business Insider reports that "Amazon is reportedly getting into legal battles with landlords over properties where it was supposed to open Amazon Fresh grocery stores."
According to the story, "The latest example is on Long Island, just outside of New York City. There, Amazon is set to face off in court with Salisbury Partners, the New York Post reported on Saturday. In April 2022, Amazon signed a lease with Salisbury for a storefront in East Meadow."
But it never opened the store. Business Insider notes that Amazon started nitpicking about the location, but the complaints coincided with a broader strategic slowdown in the opening of physical stores as the company re-evaluated its approach to this segment of its business.
The story says that "Salisbury and Amazon are scheduled to appear in New York state supreme court in Nassau County on Sept. 22 … The developer sued Amazon this past spring for $37 million, including unpaid rent on the property. Amazon claims that it has no obligation to pay any rent for the proposed store."
At the same time, "In New Jersey, another landlord is suing Amazon for $10 million after it invested in readying one of its properties for an Amazon Fresh store … Amazon has also faced lawsuits from landlords in Philadelphia and Seattle."
In certain cases, Amazon has "tried to get out of leases for Fresh stores in other parts of the country. In May, for instance, Amazon listed six properties for sublease in the Minneapolis/St. Paul area."
- KC's View:
I get that Amazon wants to rethink its approach to physical stores. But it doesn't have the right to screw landlords in the process.
We have one of these so-called "zombie stores" not far from me - it clearly was designed to be an Amazon Fresh, but it stands empty and, last time I drove by, there was no sign of life there. This isn't just bad for the landlord, but also the other stores in the center.
Hubris ain't a good look. At the end of the day, I wonder how Amazon's legal fees will compare what it would cost the company to simply pay the landlords what they are owed.