As Amazon pushes further into physical retail, it’s seeking a foothold in the Bay Area, a region where its futuristic bookstores and grocery marts have yet to find ground.

With an Amazon Books store set to open in Walnut Creek soon, it can count one victory. It has also experienced a significant setback: Plans for an Amazon grocery store in San Carlos have been abandoned, according to the site’s property owner.

Planting stores in the suburbs of San Francisco would put them in the backyard of Apple and Google, companies that view Amazon as one of their few worthy rivals. Walmart, its main foe from the world of physical retail, has its e-commerce headquarters in the Bay Area. Yet as its struggle in San Carlos shows, even Amazon has trouble facing down the strict approvals required for commercial development in the Bay Area.

An Amazon grocery store project in Sunnyvale won approval last fall, but otherwise shows little signs of moving forward. Both the Sunnyvale and San Carlos stores would have allowed shoppers to order online and then pick up groceries in person.

A storefront at Broadway Plaza promises “an exciting new retailer coming soon.” That retailer is Amazon, an unlikely entry into the world of bricks-and-mortar retailing.

Amazon’s bookstore in Walnut Creek, in the open-air Broadway Plaza shopping center, will be the company’s ninth store. It opened its first in Seattle in 2015, then followed with stores in Portland, Ore., and San Diego. Five more are listed as “coming soon” on its website, including one in Manhattan, N.Y. Though the Broadway Plaza store is not yet listed, an Amazon spokeswoman confirmed that the company is hiring store managers and associates for the site.

The 6,000-square-foot store will be in a spot formerly occupied by Victoria’s Secret, between a Coach and a Kate Spade, according to Shelly Dress, senior property manager with Broadway Plaza. A sign at the location, which is across the street from a Tesla showroom and not far from a now-closed Barnes & Noble, promises an “exciting new retailer coming soon.”

No opening date has been set, but it’s scheduled to be sometime this year, Dress said.

Calvin Crosby, executive director of the Northern California Independent Booksellers Association, said he is confident that stores will be able to weather Amazon’s move into the region.

Walnut Creek, with a population of roughly 64,000, has only one independent bookstore, Swan’s Fine Books, which opened in 2013. It sells collectible books, from California to rare genre books, and thus probably won’t compete with Amazon, which stocks books in its stores based largely on their online popularity.

Laurelle Swan, the store’s owner, said in an email that she was “not entirely surprised” by Amazon’s arrival, “as there is definitely a need in Walnut Creek for a place to buy new books.”

Amazon’s push into grocery stores is more recent. Near its downtown Seattle headquarters, the company has begun testing a checkout-free grocery store. Shoppers swipe on an app when they enter, pick out what they want and then leave. The app automatically bills them for what they take. Amazon has said the store will open to the public in early 2017.

Planning for the San Carlos and Sunnyvale sites began in 2015, according to permit records. Ware Malcomb, an architecture firm, drew up plans for the sites, which showed areas for customers to park while retrieving their groceries. Both the San Carlos and Sunnyvale projects faced opposition. In September, Sunnyvale’s Planning Commission voted to deny a resident’s appeal and approve the project, in a shopping center on Sunnyvale-Saratoga Road, with some modifications.

The next month, the San Carlos project’s developer asked to put the application on hold.

“Whatever happened at the city, they decided not to approve it,” said Stephen Swire, managing partner of Swire Property Group, the owner of the site on Industrial Road in San Carlos. “It was a huge loss for the city, the Amazon project.”

While Swire said neighbors hadn’t complained, Al Savay, the city’s community development director, said residents voiced concerns during two community meetings about how the grocery store would disturb the neighborhood, particularly truck deliveries to restock the store.

An Amazon spokeswoman did not respond to a request for comment.

Amazon has offered AmazonFresh grocery delivery throughout the Bay Area since 2013. It also offers same-day Prime Now deliveries, including groceries, to members of its $99-a-year Prime subscription program.

Amazon has flexed a physical presence in other ways. It has an air freight company called Prime Air as well as a growing network of fulfillment centers, which store and ship its goods as well as those of smaller retailers.

Even so, Amazon’s very size may be the thing that works against it as it seeks a foothold on city streets and suburban shopping centers.

“Amazon has size and resources, but they will never hold the heart of their communities in their hands as we do,” said Swan.

Source: San Francisco Chronicle