Amazon.com Inc. plans to open dozens of grocery stores in U.S. cities, the Wall Street Journal reported, a move that would expand the retail and technology giant’s grocery footprint beyond its Whole Foods Market chain.
The first of these stores will open in Los Angeles as early as the end of 2019, and Amazon is in talks to open locations in shopping centers in San Francisco; Seattle; Chicago; Washington, D.C.; and Philadelphia, the Journal reported, citing people familiar with the matter. The company is also exploring the idea of buying regional grocery stores, the paper said.
The Seattle-based company, which has been experimenting with online delivery of groceries for more than a decade, got into bricks-and-mortar food retail with its 2017 purchase of Whole Foods. Amazon has also expanded Amazon Go, its cashierless convenience store concept, to 10 stores. People familiar with the matter said last year that the company planned to open as many as 3,000 of the convenience stores, including up to 50 in 2019.
Amazon declined to comment on the Journal report.
Food retailers’ stocks all fell on the news. Kroger Co. — the nation’s biggest traditional grocer, whose chains include Ralphs and Food 4 Less — slid 4.5%. Walmart Inc. also declined. Target Corp., which gets about 25% of its sales from food, and Costco Wholesale Corp. lost ground too but then recouped their losses and finished with small gains.
Amazon’s $13.7-billion purchase of Whole Foods signaled the company’s intent to break into the $840-billion grocery market, but its presence there is much smaller than that of market leader Walmart Inc., which operates 4,750 grocery stores.
Some analysts saw Whole Foods — which stocks a limited selection of items, in contrast to Amazon’s preference for selling a wider range of products — as a starting point for Amazon in physical grocery retail. The company has since started delivering groceries from the shelves of Whole Foods locations across the United States.