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Industry News

Amazon learns that physical stores come with lease clauses

Amazon has one big disadvantage when it comes to expanding in the physical world: a lack of experience navigating the red tape associated with real estate. The online behemoth acquired Whole Foods in August for $13.7 billion and announced plans to add 85 new stores to its fleet of 473.

But most of Amazon’s physical competitors have standing lease clauses that bar competitors or at least restrict what other stores can do in a shopping center. And according to a Reuters report, they’re exercising it.

Target, Bed Bath & Beyond and Best Buy are among the chains that were happy to cohabitate with Whole Foods, are less willing to share space with Amazon. For example, documents reviewed by Reuters banned Amazon lockers and delivery operations near rivals in some states.

“Many people assume this big, 800-pound gorilla is going to come and beat up all of these retailers,” Terrison Quinn, a senior vice president at brokerage SRS Real Estate Partners, told Reuters. “I just don’t think that’s going to be the case.”

By Brannon Boswell

Managing Editor/SCT

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