Amazon is planning to open a chain of grocery stores, which would be separate from Whole Foods, according to a Wall Street Journal report. The flagship store is expected to open in Los Angeles by the end of 2019 and will be followed by two other stores which already have signed leases, per sources close to the matter.
Amazon could potentially buy-out regional grocery store chains across the US, and is apparently focusing on metropolitan areas like San Francisco, Seattle, Chicago, Philadelphia and Washington D.C. According to sources, the grocery stores will be around 35,000 square feet, slightly larger than half the size of an average supermarket.
Still nameless, Amazon’s grocery store chain will likely sell more products than Whole Foods, a health-foods store that does not carry goods containing any artificial preservatives, flavors or sweeteners. Amazon has also hinted that the new stores will offer lower-prices than Whole Foods.
The as-yet-unnamed chain will be distinct from Amazon’s upscale Whole Foods Market brand, according to a report in The Wall Street Journal.
Prices are expected to be lower, and product lines wider than those carried by organic-obsessed Whole Foods.
The Journal’s report, which has Amazon’s newest grocery venture opening its first store in Los Angles, follows by days the e-commerce giant’s killing the 365 brand by Whole Foods chain.
The three-year-old 365 chain — also designed for cost-conscious shoppers — will see its nine outlets converted into regular Whole Foods stores by the end of the year.
“Whole Foods prices have been trending down, so it didn’t make a lot of sense to keep the brands separate,” said Loop Capital Markets analyst Anthony Chukumba.
A potentially more appealing model is Amazon Go — the cashier-less convenience store launched in January 2018 to dispense snacks, salads and other grab-and-go food.
Chukumba called the Amazon Go shopping experience “just so easy.”
“If they successfully implement that, it would be a home run,” he said.
Amazon declined to comment on a new grocery chain, and it could not be learned if plans call for the use of Amazon Go’s cashier-less technology and shelf-scanning robots.
The Journal reported that, in addition to Los Angeles, the company is in talks for shopping-center space in Chicago, Philadelphia, San Francisco, Seattle and Washington, DC.
Still, knowing Amazon’s penchant for tinkering and testing, Gordon Haskett analyst Chuck Grom told The Post he didn’t expect the new venture to have any near-term “material impact on the large grocery chains.”
Investors weren’t so sure.
While Amazon climbed 2 percent in Friday trading, Kroger dropped 4.5 percent. Walmart fell 1 percent, and Sprouts Farmers Market was down 0.5 percent.