Amazon Reportedly Planning to Open Several Dozen Non-Whole Foods-Branded Grocery Stores

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Key Points

Amazon is reportedly planning to expand its presence in the US grocery market by building new stores it will operate under a banner other than Whole Foods Markets, which it acquired in 2017, and with a more typical product offering. Amazon is also considering acquiring several regional chains. At the same time, the company is expanding its fleet of Whole Foods Market and Amazon Go stores.

  • Amazon plans to open several dozen grocery stores in major US cities, with the first store in Los Angeles at the end of the year, according to an article in the Wall Street Journal. The company has already signed leases for openings next year, and talks are underway for stores in other cities.
  • Amazon is reportedly not planning to open these stores under its Whole Foods Market banner. The new stores are expected to offer a wider, more typical assortment, at lower price points, for example, including items that contain artificial ingredients and other additives.
  • The company is also reportedly considering purchasing retail grocery chains with about a dozen stores each.

Amazon Reportedly Planning to Open Several Non-Whole Foods Grocery Stores

Amazon is planning to open several dozen grocery stores in major US cities, with the first store expected to open in Los Angeles at the end of the year, according to the Wall Street Journal.

The company has already signed leases for openings next year, and talks are underway for stores in other major cities. Amazon has reportedly signed leases for two openings in 2020.

Amazon is reportedly not planning to open these stores under its Whole Foods Market banner, though the ultimate name of the stores remains unclear.

The new stores are expected to offer a wider, more typical assortment, at lower price points, for example, including items that contain artificial ingredients and other additives.

The company is also reportedly considering purchasing retail grocery chains with about dozen stores each.

Coresight Research’s Take

Amazon appears to be moving aggressively to establish a presence in the mainstream US grocery market that is not currently served by Whole Foods. The company appears to be planning to use a combination of the reported new stores, plus expansion of its current 475-store Whole Foods fleet, to expand its footprint in grocery, including expanding its unstaffed Amazon Go stores. Euromonitor International estimates the US grocery market will be worth $521 billion in 2019, and large grocers are also seeking to take share within the $655 billion US retail food-service market (January through November 2018.) 

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