Two years after making a surprise acquisition of Whole Foods, Amazon is about to go even deeper into the grocery business by launching a completely new chain of its own. One that’s separate from Whole Foods and with prices that reportedly would undercut Whole Foods, notorious for its expensive premium items.
That news comes via The Wall Street Journal, and marks Amazon’s continued push into the real world of brick-and-mortar retail, with Amazon’s presence now including everything from physical book shops to convenience stores.
What we know so far: Amazon’s ambition here is to launch a new chain with “dozens” of stores, starting with one in Los Angeles that could open as early as this year. Other markets that have apparently caught the retail giant’s interest for this include San Francisco, Seattle, Chicago, DC, and Philadelphia. In some markets, it’s more than “interest,” since Amazon has reportedly already started quietly signing leases related to this effort.
The locations would be smaller than your typical 60,000-square-foot store, measuring closer to around 35,000 square feet, according to the WSJ’s reporting. Related to this is the possibility that Amazon is apparently also considering outright buying up a regional grocery chain or two.
The Whole Foods angle here is certainly intriguing, given the assumption that Amazon’s acquisition of it was the company’s entry point into the space, albeit a surprising one. Amazon of course gave no indication it would consider launching a cheaper version of its own later — which is how this will be seen, though the unofficial comments at this stage point to the new grocery chain not being intended as a direct competitor to Whole Foods.
Yes, it will offer cheaper goods, but will also reportedly include a different product mix than Whole Foods’. One thing that’s not clear is whether the new chain will include some kind of Amazon-specific branding, or if the company will come up with a new name for it. And, no surprise, Amazon isn’t commenting on any of this yet.
As we mentioned, this is one more complement to the increasingly real-world portion of Amazon’s vast retail portfolio, which also includes a rollout of cashier-free Amazon Go stores. There are currently 10 of those, according to the company.