Why Amazon Fresh’s Strategy Misses the Mark: Losing to Aldi, Lidl, and WinCo

 

Amazon has built its empire on delivering items quickly and at low prices, revolutionizing e-commerce along the way. However, that formula has stumbled in the competitive and customer-sensitive grocery segment according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Johnson believes that Amazon Fresh, instead of using its tech-driven efficiency to connect with customers and meet evolving food trends, has lost focus on its core differentiators. Meanwhile, competitors like Aldi, Lidl, and WinCo are thriving by zeroing in on customer priorities such as affordability, efficiency, and fresh offerings.

Our Grocerant Guru® dives into the missteps he perceives Amazon Fresh has made and how it can recalibrate to compete effectively in 2025.

Where Amazon Fresh Went Wrong

1.       Tech Over Touchpoints: Amazon Fresh leaned heavily into futuristic elements like "Just Walk Out" technology and app-driven shopping while neglecting the basics of customer engagement, store atmosphere, and inventory relevance. Grocery customers want seamless tech and a relevant in-store experience.

2.       Inconsistent Value Proposition: While Amazon Prime sets a standard for value in convenience, Amazon Fresh’s pricing strategy lacks clarity. Groceries perceived as neither the cheapest (compared to Aldi) nor premium (compared to Whole Foods) confuse customers.

3.       Lagging Localization: Amazon Fresh struggles to localize offerings, often presenting generic selections that fail to reflect regional preferences and consumer needs—something its competitors excel at.

How Aldi, Lidl, and WinCo Have Outpaced Amazon Fresh

These budget-focused grocers have consistently aligned their strategies with what grocery customers value: price, quality, and convenience. Here’s what they’ve done better:

1. Aldi: Champion of Efficiency

·         Private Label Dominance: Aldi’s private-label products deliver high quality at lower costs. This not only builds customer loyalty but also ensures profitability on tight margins.

·         Streamlined Operations: With smaller stores and fewer SKUs, Aldi reduces overhead and simplifies shopping.

·         Reliability in Price Perception: Aldi focuses on delivering consistent bargains, reinforcing its image as the go-to budget grocer.

2. Lidl: Disruptive Innovator

·         Premium at Affordable Prices: Lidl combines cost-effective pricing with surprisingly high-quality items, particularly in bakery and produce.

·         Treasure-Hunt Experience: Similar to Costco’s strategy, Lidl blends everyday low prices with unexpected finds, delighting bargain-seeking shoppers.

·         Smaller Store Footprint: Like Aldi, Lidl optimizes for simplicity and cost-efficiency.

3. WinCo: Customer-Led Affordability

·         Employee Ownership Model: This model motivates workers to enhance customer service and loyalty while controlling costs.

·         Bulk and Pantry Staples: WinCo appeals to budget-conscious consumers by focusing on bulk buys and staples, which are especially attractive in uncertain economic times.

·         Low Overhead, No Frills: WinCo thrives by avoiding excess and investing in high-turnover categories that maximize value perception.

What Amazon Fresh Should Focus On in 2025

To regain market relevance, Amazon Fresh must implement targeted, consumer-focused strategies that blend technology with grocery fundamentals. Here are four areas to prioritize:

1. Refocus on Price Leadership

Amazon Fresh needs to leverage its purchasing power to deliver unbeatable value on everyday essentials. Reducing costs in key categories like produce and fresh foods can establish price credibility.

2. Build a Clear Brand Identity

Right now, Amazon Fresh straddles the line between tech-driven and convenience-oriented without clarity. It should embrace a niche—such as "affordable innovation"—to stand out amidst Aldi’s price dominance and Whole Foods’ premium appeal.

3. Localized Product Assortment

Amazon Fresh must prioritize curated, regionally relevant assortments that cater to the unique tastes and preferences of its store markets. Including local brands and ethnic foods can drive foot traffic and loyalty.

4. Customer-Centric Technology

Amazon’s technological edge should enhance the customer experience, not overwhelm it. Features like efficient self-checkout, loyalty-driven app rewards, and data-driven promotions must be intuitive and valuable, not overly complicated or invasive.

Think About This

Amazon Fresh entered the grocery space with lofty ambitions but has yet to find its footing. Aldi, Lidl, and WinCo have capitalized on clear strategies that resonate with their customers while Amazon Fresh has leaned heavily on its technological prowess at the expense of the basics. For Amazon Fresh to succeed, it must refocus on price leadership, brand identity, localization, and customer-centric technology. Without these shifts, it risks further ceding market share in an increasingly competitive and consumer-driven industry.

For international corporate presentations, regional chain presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert, and public speaking will leave success clues for all. For more information visit GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869

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Evolution of Wendy's Breakfast Strategy as a Disruptor

 

While Wendy’s previously struggled to define itself in the early-morning crowd, the company finally broke the mold with a multi-pronged marketing and operational strategy according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Let’s take a look:

1.       A Simple Yet Compelling Menu
Wendy’s focused on aligning its breakfast offerings with its broader brand identity—quality ingredients and freshly prepared food. Signature items like the Breakfast Baconator and Frosty-ccino bridged the gap between familiar Wendy’s lunch/dinner favorites and new, craveable breakfast options.

2.       Marketing Precision
Wendy’s spent over $90 million to promote its breakfast launch in 2020. Leveraging humor and cheeky comparisons to competitors (like McDonald’s iconic breakfast items), the campaigns resonated with younger audiences looking for an alternative.

3.       Operational Overhaul
Learning from prior breakfast failures, Wendy’s implemented standardized operations, emphasizing speed and freshness, which addressed traditional hurdles in staffing and food preparation at the crack of dawn.

Key Metrics Driving Success

In its first year, Wendy’s breakfast sales accounted for roughly 7–8% of systemwide sales, exceeding initial projections. By 2022, breakfast represented nearly 10% of its sales, putting it on a trajectory to rival established players in the breakfast arena. Furthermore:

·         Breakfast sandwiches like the Maple Bacon Croissant outperformed legacy breakfast items at competitors, with industry analysts highlighting its strong flavor profile as a disruptor.

·         Drive-thru innovations—such as app-based preorders and partnerships with delivery platforms like DoorDash—enabled breakfast to reach a wider audience amid a shift to remote work environments.

How Wendy’s Positioned Itself for Long-Term Breakfast Success

Consumer Touchpoints that Resonate:

1.       Flavor First: By positioning their breakfast offerings as bold and indulgent, Wendy’s appeals to younger consumers craving indulgence during a traditionally "simple" meal.

2.       Fresh is Best: Leveraging its “Fresh, Never Frozen” beef slogan carried over into freshly cracked eggs and made-to-order sandwiches.

3.       Value + Convenience: Offering breakfast deals, including $3 combos, effectively challenged McDonald’s value breakfast items without eroding its premium image.

4.       Tech and Delivery Focus: As consumer behaviors shifted to app ordering and delivery, Wendy’s ensured breakfast could be part of the mix, even on hybrid work-from-home schedules.

Disrupting Foodservice: Where Will Wendy’s Be in Two Years?

Wendy’s breakfast success is a key component of its overall growth strategy, but its positioning has broader implications for the foodservice sector:

1.       Elevating Breakfast’s Premium Appeal
In two years, Wendy’s could emerge as the dominant premium breakfast destination, particularly among millennial and Gen Z diners, who value flavor innovation and digital convenience.

2.       Expanding the "Brunch-ification" Trend
Wendy’s ability to blend traditional breakfast offerings with indulgent, mid-day menu items could expand its menu versatility, establishing its breakfast hour as a destination for mid-morning meals and informal brunches.

3.       Challenging Established Breakfast Leaders
By continuing to invest in marketing that plays up its competitive edge in flavor and quality, Wendy’s could threaten the dominance of McDonald’s and Dunkin’ in the breakfast space. Experts suggest Wendy’s breakfast sales could reach 15–18% of systemwide sales by 2026 if momentum persists.

Think About This

Wendy’s deliberate and data-driven entry into the breakfast daypart has not only revitalized the segment but positioned the brand as a potential foodservice disruptor. With sustained innovation, marketing muscle, and tech-driven convenience, Wendy’s breakfast could not only solidify itself as a mainstay but also define breakfast's future for the quick-service industry. The breakfast Baconator’s rise, coupled with bold marketing campaigns, highlights Wendy’s shift from contender to potential leader—and in two years, its disruptor status may turn into category dominance.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Applebee’s Winning Fast-Food Customers

 

As inflation continues to squeeze household budgets, Applebee’s is making strategic moves to capture fast-food customers looking for comfort, value, and a real dining experience according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In the face of rising competition, the casual dining chain is doubling down on the price-value relationship in consumers' minds. With its new $9.99 Really Big Meal Deal featuring all-you-can-eat fries and bottomless beverages, Applebee’s is blending affordability with generosity, taking on the fast-food giants at their own game while emphasizing the unique advantages of sit-down dining.

The Price-Value Relationship

Applebee’s leadership has smartly recognized that the value proposition is central to the modern consumer. Amid an environment where a fast-food burger combo can easily exceed $12, the $9.99 price point of the Really Big Meal Deal stands out. Customers can choose a hearty burger or chicken sandwich paired with all-you-can-eat fries and endless soft drinks—a level of abundance that outstrips standard fast-food offers.

Applebee’s President, Tony Moralejo, underscored this during a recent interview on Yahoo Finance’s Asking for a Trend:

“The best value meal in America just got even better.”

Indeed, the shift from transactional drive-thru dining to the value-laden sit-down meal strikes a chord with families balancing budgets while wanting a more meaningful experience. Unlike most fast-food restaurants, Applebee’s provides an environment where families can relax, sit together, and enjoy a meal served by a real person instead of a robotic ordering screen or an app.

Success Clue

Understand Who is Your Customer 

Comfort Dining Meets Affordable Indulgence

While fast-food chains compete on speed and convenience, Applebee’s offers something distinct: a comfortable dining experience with perks that enhance perceived value. The Really Big Meal Deal builds on this advantage:

·         Family Dining: Applebee’s cozy booths and inviting atmosphere create a setting for families to connect over a meal without feeling rushed.

·         All-You-Can-Eat Perks: Endless fries and free drink refills add an element of indulgence that’s hard to find at quick-service outlets.

·         Customer-Centric Service: A friendly server, attentive to diners’ needs, delivers a personal touch absent from the fast-food assembly line.

This combination resonates particularly well in challenging economic times, where consumers are seeking more than just calories for their dollar—they want value that feels abundant and personal.

Value Wars Heating Up

Applebee’s $9.99 offering arrives in the midst of a fierce value battle with rival Chili’s, whose $10.99 3 for Me menu has been making waves. Chili’s offers bottomless chips and salsa as part of its bundle, but Applebee’s counter is clear:

“Salsa and chips, it’s filler, right?” said Moralejo, highlighting the substantiality of the fries-and-drink combination.

Applebee’s value-forward initiative aligns well with trends seen in the restaurant industry, where brands capitalizing on perceived abundance are winning. Consumers are comparing not just price tags, but also portion sizes, perceived quality, and the total dining experience.

Navigating Risks of Value Promotions

While free food promotions like Red Lobster’s infamous “Endless Shrimp” promotion have proven disastrous for profit margins, Applebee’s approach appears more calculated. Fries and soft drinks have low food costs compared to proteins, allowing the chain to balance profitability with perceived value. Franchisees, too, have reportedly supported the program’s extension past its initial month-long run, signaling operational confidence.

By providing satisfying portions with its new deal, Applebee’s also keeps diners longer, potentially boosting appetizer and dessert sales and, in turn, increasing the check average.

Think About this: Strength in Real Connections

Applebee’s is winning over fast-food customers by emphasizing the unique advantages of casual dining—comfort, quality service, and abundant value. The Really Big Meal Deal taps into price-conscious consumers’ need for indulgence without guilt and families’ desire for connection. In a world where fast food is dominated by convenience and automation, Applebee’s has carved out a niche: affordable meals served with human warmth in an inviting atmosphere.

This effort is more than a tactical promotion. It’s a strategy that repositions Applebee’s as a competitive option in both the casual-dining and fast-food categories, appealing to diners who don’t just want to eat—they want to belong.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success

Coffee Sector Conundrum: Price and Innovation Win Legacy Brands Falter as New Regional Chains Shine

 

The coffee sector is facing a dynamic shift as legacy brands struggle to innovate while new regional players capitalize on customer preferences for value, quality, and service. As consumers redefine what they expect from coffee experiences, price sensitivity and innovative offerings are driving a wave of migration away from industry stalwarts. Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions® predicts this trend is only accelerating, leaving no end in sight for the upheaval in one of the most profitable foodservice sectors.

The Legacy Brand Struggle: Too Little, Too Late

For years, legacy coffee chains have relied on brand familiarity, standardized menus, and their historical dominance to hold market share. However, as inflation pinches consumers' wallets and expectations for personalization, service speed, and innovation rise, these brands appear to be losing touch with their audience. Many are now bogged down by dated operations, stale product lines, and an inability to price competitively while maintaining perceived value.

The conundrum: higher prices without higher customer satisfaction. Recent food industry data reveals that 65% of coffee drinkers prioritize price over brand loyalty. Couple that with 47% of consumers seeking regional specialty options, and the landscape becomes fertile ground for disruption.

 

Predicting Decline: 3 Legacy Brands at Risk

1.       Starbucks: Once the gold standard, Starbucks faces stiff backlash from years of price hikes. Frequent customer complaints highlight shrinking portion sizes, order inaccuracy, and subpar customer service due to mobile order chaos. Its over-reliance on technology reduces the human touch, leaving customers unsatisfied and open to alternatives.

o    Sales growth is slowing in mature markets as customers explore boutique options.

o    Frequent store closures in underperforming locations signal a larger struggle ahead.

2.       Dunkin': While affordable, Dunkin' has struggled with maintaining consistency in product quality and its rollout of innovation. New beverage options often appear half-hearted compared to regional competitors, especially among younger demographics looking for unique flavor offerings.

o    Challenges include limited regionalized products and declining afternoon sales.

o    Store attrition in the West underscores its inability to broaden appeal outside core markets.

3.       Tim Hortons: Despite being iconic in Canada, Tim Hortons has stumbled in the U.S. market by failing to adapt to local preferences. Its emphasis on generic menu items over modernized, niche coffee beverages alienates experience-seeking customers.

o    Sluggish growth in U.S. markets contributes to steady customer churn.

o    Lack of innovative bundling strategies hurts all-day dining sales.

Combined, these brands are faltering in ways that extend beyond short-term challenges. Without reimagining their strategies to include tailored pricing, creative flavors, and exceptional service, the decline in market relevance will continue.

 

The Rise of the Regional Innovators

On the flip side, a new wave of regional coffee chains is redefining customer value by focusing on the elements that drive brand adoption and loyalty: competitive pricing, regional flavor twists, and superior service. These emerging leaders blend experiential elements with functional convenience to steal share from legacy brands. The Grocerant Guru® predicts these chains will lead the next evolution of the coffee sector:

1.       Dutch Bros Coffee: Founded in Oregon, Dutch Bros combines competitive price points with an extensive menu of creative beverages tailored to younger audiences. Its use of drive-thru-only models aligns perfectly with speed and convenience demands.

o    Sales skyrocketed 45% year-over-year in many regions.

o    New store openings across key markets reinforce its upward momentum.

2.       Scooter's Coffee: By specializing in specialty coffee and breakfast items served with a community-first approach, Scooter's Coffee has gained momentum among budget-conscious consumers who still crave flavor innovation.

o    Its focus on regional market expansion and customer service excellence sets it apart.

o    The loyalty of local customers positions Scooter’s for sustained long-term growth.

3.       Black Rifle Coffee Company: Leveraging strong brand messaging, a niche customer base, and bold flavor options, Black Rifle has established a reputation as a premium coffee innovator without alienating middle-market customers.

o    Their growth strategy includes retail diversification and proprietary packaging that empowers fresh coffee adoption at home.

o    A cult-like following ensures stable, loyal revenue streams.

These chains share a critical advantage over legacy coffee competitors: their ability to connect with today's consumer touchpoints. Whether it's Dutch Bros' unparalleled speed, Scooter's personalized customer interactions, or Black Rifle’s distinct branding, these companies are capturing momentum where legacy brands lag.

 

3 Key Ways Regional Coffee Brands Are Winning

1.       Mix-and-Match Flavor Options: New coffee chains attract customers with endless customization opportunities. Limited-edition regional flavors, bold offerings like energy drinks, and iced or hot variations allow customers to make every visit their own.

o    Fact: 78% of Gen Z coffee drinkers value unique seasonal beverages.

2.       Better Price-to-Value Ratio: Competitive pricing without sacrificing perceived quality drives adoption among value-focused households.

o    Dutch Bros leads this charge with strategic pricing in key regional markets, maximizing check averages while maintaining affordability.

3.       Community and Customer Service Excellence: Technology augments the customer experience, not replaces it. High-touch service models with faster, more accurate orders are keeping regional players ahead.

o    Fact: 62% of coffee customers say friendly staff influences brand loyalty.

 

The Grocerant Guru’s Prediction: Innovation Fuels a Coffee Renaissance

The coffee sector conundrum boils down to this: price increases without equivalent innovation spell disaster for legacy players. Meanwhile, nimble regional chains are redefining what success looks like with a hyper-focus on flavors, speed, and price that align with modern customer demands.

Expect Starbucks, Dunkin', and Tim Hortons to face continued erosion of market share, shrinking footprints, and declining sales. In contrast, Dutch Bros, Scooter’s Coffee, and Black Rifle Coffee will not only maintain their upward momentum but drive substantial industry disruption through innovation, value, and brand loyalty.

Coffee brands unwilling to adapt will find themselves relegated to history, while innovative chains embrace growth and steal market share sip by sip. The coffee renaissance has begun—and there’s no end in sight.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

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