Business is booming at first Amazon Go stores

Initial reports about the Amazon Go store concept have been positive, and sales appear strong. In fact, advisory firm Brick Meets Click estimated that sales per square foot at the Seattle store are about $2,700. That's nearly $5 million in annual sales for an 1,800 square foot, cashierless store.

According to Brick Meets Click, "Amazon Go stores produce more sales per square foot than virtually any other retailer except Apple and a few other specialty stores."

The company also estimates that the inventory turns over around 50 times per year, which is four-to-five times more than at other retail operations.

Furthermore, digital marketing firm inMarket believes Amazon Go stores are more of a threat to fast-casual restaurants and convenience stores than to supermarkets. Peak visitation hours at Amazon Go stores in Seattle and Chicago over the past 60 days have been on weekdays during lunch and breakfast.

"Amazon Go's combination of ready-to-eat and ready-to-cook food choices challenges both grocers and restaurants," reported Brick Meets Click Co-Founder and Managing Partner Steve Bishop. "With no lines or waiting, it's easy to see why people would stop by twice a day - first to grab lunch and later to pick up a dinner portion on their way home."

There are six Amazon Go stores open, all with the company's "Just Walk Out" technology, and more locations are planned. In fact, Bloomberg reported in September that Amazon is mulling plans to open up to 3,000 Amazon Go stores by 2021.

Lidl shifting strategy, may consider leasing, smaller stores

Lidl announced earlier this month that it is changing its real estate strategy and may now consider leasing sites, and opening stores in the 10,000 to 21,000 square foot range. Up until now the company has said it would only purchase properties where it would construct 36,000 square foot stores.

William Harwood, Lidl's director of communications, said the change in strategy is an effort to "accelerate our site acquisition along the East Coast." Harwood also noted that Lidl is looking for opportunities in urban areas where larger sites are harder to find.

Harwood claimed that Lidl is "very pleased with how customers have taken to the 47 stores we have opened over the past six months."

However, industry analysts speculate that Lidl's shift in real estate strategy may be due to disappointing results.

A report released by inMarket showed that the first Lidl stores opened in June with a 2.6% share of customer visits in the markets in which it was operating. Its share slid to 2.3% in July and 1.7% in August before rebounding in September to 1.9%. inMarket's chief marketing officer said that he will have a better feeling for the discount grocer's future once holiday traffic is analyzed.

Lidl recently backed out of planned deals in New Jersey, Pennsylvania, Virginia and Ohio.