Amazon is looking into creating a new grocery chain that would likely be separate from Whole Foods, according to The New York Times.
This new chain would blend aspects of online ordering and traditional shopping, and may be inspired by a 2017 internal memo circulated ahead of the Whole Foods acquisition.
The report also describes certain areas in which Amazon has struggled to integrate with Whole Foods, such as when it comes to cutting prices and incorporating the upscale grocer into its delivery system.
Amazon is brainstorming a new type of grocery store that would combine traditional shopping with online pickup, according to The New York Times. Such a move would mark another push by Amazon to establish dominance in the grocery shopping space following its $13.7 billion acquisition of Whole Foods in 2017.
The Whole Foods acquisition certainly furthered Amazon’s presence in the grocery market, but it has not satisfied the company’s vision for overhauling the supermarket shopping experience, according to the Times. The report cites several areas in which Amazon has struggled in its efforts to cut Whole Foods’ prices and incorporate the grocery chain into its delivery system.
It’s not the first time we’ve heard of Amazon’s reported plans to build its own grocery chain that could be separate from Whole Foods and its Amazon Go cashierless convenience stores. In March, The Wall Street Journal reported that Amazon is planning to open dozens of grocery stores in the United States, with the first store potentially opening in Los Angeles by the end of the year.
Amazon has also posted several job listings for store designers over the past few months. One recent posting, which the Times first spotted, is seeking a candidate to join a team that is “developing creative solutions” for a “retail concept” that houses “multiple customer experiences under one roof.”
Amazon did not immediately respond to Business Insider’s request for comment.
Here’s a look at what we know about Amazon’s grocery plans so far based on these recent reports.
Amazon’s grocery stores could combine in-store shopping with online ordering.
The online retail giant is looking into building new grocery stores from the ground up rather than significantly expanding Whole Foods, according to The New York Times. These new stores would be centered on pickup and delivery, and would include a separate section where shoppers could pick out fresh groceries. The Journal also reported that Amazon’s grocery stores would have a big focus on customer service and pickup orders.
The Times report cites an Amazon memo circulated in early 2017 before it acquired Whole Foods that outlines the company’s vision for upending the grocery-shopping experience. The memo described a concept for a store that would allow shoppers to order nonperishable items through an app as they roamed aisles to pick out fresh groceries. These nonperishable items, which could include staples like paper towels and canned foods, would be brought down to the checkout area as the customer shops, and the supermarket would also have a designated area to pick up groceries ordered online.
It’s unclear if the purported stores will adhere to that vision, but based on reports from the Times and the Journal it sounds like they may at least be inspired by it.
The supermarkets could start appearing early next year.
While Amazon is reportedly planning to open its first grocery store in Los Angeles as early as the end of 2019, the company could open two more locations in early 2020, the Journal reports. Amazon has signed leases for at least two locations in addition to the Los Angeles store, but the report did not say where these other two supermarkets would be located. However, discussions are said to be in place for stores in Seattle, San Francisco, Chicago, Washington D.C., and Philadelphia.
Amazon’s new grocery chain may also be cheaper than Whole Foods.
Amazon’s new chain is likely to be separate from Whole Foods, as reports from both the Journal and the Times indicate. One way Amazon may differentiate its own chain from Whole Foods is by offering a different selection of products at a lower price point, according to the Journal.
Amazon’s stores might be smaller than traditional grocery markets.
Amazon’s stores will likely be about 35,000 square feet, which is smaller than the average 60,000 square foot supermarket, according to The Journal.
They may also sell items other than food.
Amazon has expressed interest in selling heath and beauty items at its new chain in addition to groceries, according to the Journal.
