Amazon plans to open dozens of grocery stores across the United States as it looks to expand in the food business, the Wall Street Journal reported on Friday, citing people familiar with the matter.
It said Amazon is exploring a strategy of strengthening its new supermarket brand by purchasing regional grocery chains that operate at least a dozen stores.
Amazon, which bought the upscale Whole Foods chain for $13.7 billion in 2017, is now in talks to open grocery stores in shopping centers in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia. The new stores were not intended to compete directly with Whole Foods, it said.
The online retail giant plans to open its first store in Los Angeles as early as the end of the year, and has already signed leases for at least two other grocery locations with openings planned for early next year, the report said. Amazon declined to comment.
“We’re not surprised,” said David Bujnicki, in charge of investor relations at Kimco Realty Corp, an owner or manager of 437 mostly grocery-anchored shopping centers.
Amazon is slow but deliberate when rolling out new brick and mortar concepts, he said. He added that a new grocer would validate the need for physical stores, a business that has been hit hard by e-commerce, whose surge Amazon has led.
Amazon rival Walmart, the largest grocer in the country, has not been caught off guard as it has been preparing for competition to heat up for nearly two years, according to a source with knowledge of the company’s business plans.
“Their (Amazon’s) ambitions in this space have been known for a long time,” the source said.
The prospect of more competition has spurred Walmart to action, the source said. Walmart will have grocery pickup service at 3,100 stores by next January, and offer grocery deliveries from about 800 more stores by the end of the year, bringing the total number of stores offering delivery service to 1,600 stores
Leave a Reply