Amazon Foods?
That may not be the name, but according to sources cited by The Wall Street Journal, expect to see brick-and-mortar Amazon grocery stores by the end of the year.
The Journal reported that the first store would likely open in Los Angeles and that the retail giant has at least two more leases signed marked for grocery locations. Those two stores are expected to open early next year with locations yet to be determined. Sources told The Journal that cities such as San Francisco, Seattle, Chicago, Washington, DC and Philadelphia are being targeted.
In addition to opening new grocery outlets, The Journal reported that Amazon is also exploring purchasing regional grocery chains with about a dozen stores under operation.
“The new stores aren’t intended to compete directly with the more upscale Whole Foods stores and will offer a different variety of products, at a lower price point,” reported The Journal. “Whole Foods doesn’t sell products with artificial flavors, colors, preservatives and sweeteners, among other quality standards.”
It is expected that Amazon is targeting new developments and occupied stores with leases ending soon. The stores are also expected to be about 35,000 square feet, smaller than the typical 60,000-square-foot supermarket, reported The Journal.
The potential Amazon grocery stores may also generate greater opportunity for big brand suppliers that have hoped to create inroads into Whole Foods since Amazon acquired the natural retailer.
The Amazon Grocery stores may also provide a way to better reach lower-income consumers by offering discounted versions of its Prime membership service to Americans who qualify for Medicaid and other government-assistance programs.
Amazon’s potential grocery store follows its cashierless Amazon Go stores in urban areas and a Whole Foods is expansion.
The Journal was quick to point out that while Amazon is planning on developing these new grocery stores it is by no means a sure thing.
“While Amazon has already signed leases, that doesn’t guarantee it will open the grocery stores. Retailers sign contracts and then pull out or delay store openings if certain conditions aren’t met,” reported The Journal.
