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Amazon is reportedly getting into legal fights with landlords as 'zombie' Amazon Fresh stores pile up

The front of an Amazon Fresh store in Chevy Chase, Maryland.
Amazon is reportedly facing lawsuits from landlords over some proposed Amazon Fresh stores.Alex Bitter/Insider
  • Amazon is facing lawsuits from some landlords over its proposed Amazon Fresh grocery stores.

  • One of the latest lawsuits concerns a Long Island lease that Amazon reportedly tried to get out of.

  • Amazon canceled or paused some Fresh stores over the last year as it rethinks its grocery strategy.

Amazon is reportedly getting into legal battles with landlords over properties where it was supposed to open Amazon Fresh grocery stores.

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.

The company repeatedly met with Amazon "to make them happy for months on end, and then in November 2022 they were nitpicking about things like the colors and a light," Mark Sagliocca, whose family manages Salisbury and the property in question, told the Post.

"The more I think about it, it was a stall tactic," Sagliocca added.

Salisbury and Amazon are scheduled to appear in New York state supreme court in Nassau County on Sept. 22, the Post reported. 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, according to the Post.

"Like any retailer, we periodically assess our portfolio of stores and make optimization decisions that can lead to closing existing locations or choosing not to pursue building a planned location," Jessica Martin, an Amazon spokesperson, told Insider. Salisbury did not respond to a request for comment.

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, the Post reported. Amazon has also faced lawsuits from landlords in Philadelphia and Seattle, according to the Post.

Amazon opened its first Fresh store in 2020 and has about 44 stores three years later, according to its website. But Amazon has canceled plans for some Fresh stores. This summer, it laid off hundreds of Amazon Fresh store workers, too. CEO Andy Jassy said in his annual letter to shareholders this year that the company still sees potential in grocery, though he added: "We must find a mass grocery format that we believe is worth expanding broadly."

Amazon has also 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, Axios Twin Cities reported.

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