Amazon to open all-new grocery stores separate from Whole Foods
Amazon reportedly feels confident enough in its grocery-store quests to branch out into new ventures. According to a report by The Wall Street Journal, Amazon plans to open dozens of new grocery stores that will be distinctly different than the company’s Whole Foods Market stores. The retail giant has reportedly already signed leases for some locations and plans to open the new grocery stores in cities across the country, including San Francisco, Seattle, Chicago, Philadelphia, and Washington DC.
But the first city to get a new Amazon grocery store will be Los Angeles. The report claims that Amazon will open that store by the end of this year. Although Amazon has some leases signed already, it doesn’t guarantee that the company will open stores in all of those leased locations.
It appears Amazon wants to grab a larger sector of the market by offering a wider variety of items in these new grocery stores than it currently offers at Whole Foods locations. Although the grocer has expanded its offerings since Amazon bought it back in 2017 for $13.7 billion, Whole Foods is generally considered an upper-scale grocery store chain and it continues to have strict food quality standards for the items it carries (no artificial flavor, colors, preservatives, sweeteners, etc).
Aside from the fact that Amazon plans to open some stores this year, little is known about the intended layout. Reportedly, Amazon is looking to open in locations that are smaller than typical grocery stores—35,000 square feet instead of 60,000 square feet. The Wall Street Journal’s report also claims Amazon is looking into an “acquisition strategy” for purchasing smaller, local grocery store chains in order to more quickly expand its own plans.
This move continues Amazon’s push not only into the grocery industry, but into the brick-and-mortar space as a whole. Amazon’s physical store locations, grocery-focused or otherwise, are dwarfed by those of other companies like Walmart and Target (both of which have been experimenting with tactics to compete with the online retail giant). Amazon clearly has its online retail business on lock, and now it likely wants to get a better grasp on how people shop in stores by opening more of its own locations across the country.
Amazon almost immediately brought changes to Whole Foods after the acquisition. It instituted special sales and discounts for Prime members and it continued to expand its grocery delivery and pickup services with the help of those additional physical stores. Whole Foods has been key to Amazon’s come-up in the grocery space, and it’s likely that Amazon’s investment in the chain will not slow down even in light of this new venture. As recently as this week, Whole Foods CEO John Mackey has publicly trumpeted the partnership as an overall positive.
These new plans come as Amazon continues to roll out new Go cashierless stores across the country as well. Currently, there are Amazon Go stores located on Seattle, San Francisco, and Chicago. It’s unclear if Amazon intends for its new grocery stores to be cashierless, but the new locations will give the company another avenue to test out such technology if it chooses to do so.
