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Reuters reports on how Amazon’s bricks-and-mortar ambitions are bering stymied in at least some locations when retail competitors are able to use legal means to slow it down.

Example: In San Francisco, Amazon reportedly wanted to open a Whole Foods store in a location vacated by Macy’s. But Target, which also has a location in the mall, had the legal right to prevent Whole Foods from coming in because of concerns about how Amazon might utilize it.

According to the story, “Early attempts to persuade Target failed, and Whole Foods may now have to concede certain Amazon initiatives - such as lockers where customers can pick up goods ordered online - if it wants the location, the people said. Talks are ongoing.

“A Reuters examination of real estate agreements and interviews with 20 retail landlords, lawyers and brokers show that the strings attached to operating in malls like City Center present an emerging and little-scrutinized challenge to Amazon’s quest to re-shape Whole Foods … Reuters could not determine the full extent of limits on Whole Foods stores because lease deals vary from mall to mall, and many are not public. While restricting how neighbors operate is a standard practice in retail, Amazon is new to feeling the heat.”
KC's View:
It would be naive to suggest that traditional bricks-and-mortar stores are going to be able to stop Amazon’s physical expansion, especially when it comes to its Whole Foods business. In the end, landlords are going to do everything they can to find the biggest and best tenants that will drive traffic to their shopping centers … which is a particularly major challenge at a time when malls are facing some level of extinction because of changing consumer and technology trends.