Amazon is in a legal battle in Pennsylvania's Montgomery County over its pause on new openings for its grocery store chain.

Federal Realty Investment Trust filed a lawsuit in Montgomery County Civil Court on March 21 alleging that Amazon is in technical default on its 31K SF lease for an Amazon Fresh store at Willow Grove Shopping Center, the Philadelphia Business Journal reports. In a counterclaim filed on May 8, Amazon alleged that Federal Realty still hasn't completed its portion of the work on the store.

Federal Realty's suit claims that Amazon executives disclosed during an October conference call that it wouldn't be executing all of its planned Amazon Fresh openings in 2023 before halting internal work at the Willow Grove store and withholding rent, PBJ reports. Alleging that Amazon's refusal to finish and open the store represents a default, Federal Realty is seeking $180K in unpaid rent and expenses.

Amazon's counterclaim alleges that Federal Realty misinterpreted the meaning of the October call, PBJ reports. Amazon had been paying about $71K in rent and expenses since signing its lease in April 2020 and applying for a liquor license through its local LLC in August 2021.

Despite its denial of Federal Realty's claims, Amazon has publicly acknowledged a nationwide slowdown of the big Amazon Fresh rollout it had planned for 2023. The company's goal for the Amazon Fresh brand this year is to experiment with a format change, CEO Andy Jassy said in February.

The Willow Grove store is one of six Amazon Fresh locations in the Philly area that sit inactive despite external construction appearing complete, PBJ reports. Amazon Fresh has two active stores in the region, one in Broomall and the other in Warrington.

In its initial filing, Federal Realty claimed to have gone so far as to move Barnes & Noble to another part of Willow Grove Shopping Center to make way for Amazon's preferred spot, PBJ reports. In December, Federal Realty began construction on a restaurant-heavy second phase at the 211K SF center.