Amazon is trying to take over the grocery industry as it makes move to launch a new chain of grocery stores following its purchase of Whole Foods.
According to reports from the Wall Street Journal, the e-commerce giant, Amazon has started activating plans to launch grocery stores in different United States cities including San Francisco, Los Angeles, Chicago, and Philadelphia. Wall Street Journal cited a source familiar with the matter stating that this move is one of many moves that will happen in the next few months.
In 2017, Amazon spent $13.7 billion on the purchase of Whole Foods. The difference between the Whole Foods chain and the one the company is currently working on is that the new chain would have more affordable products. The company is also making plans to buy regional companies to speed up the growth of its new chain. For now, Amazon hasn’t confirmed this information. However, if it is true, opening these new supermarkets will give the e-commerce giant a stronger chance in the $750 billion grocery industry.
A while ago, the company introduced Amazon Go, a grocery concept that cuts out cashiers by allowing buyers to scan products themselves using the app. Amazon Go is available in some stores in San Francisco, Stealth, and Chicago. It is planning to open more in other cities soon. The company is also offering pick up services in some locations as part of its Prime subscription service.
The CEO of The Retail Doctor, Bob Phibbs, said that even if Amazon has been entering into the physical retail space for a while now, having a new chain of supermarkets will change the game in the industry. In his words:
“Ninety percent of groceries are still sold in brick-and-mortar,” Phibbs said. “Now, they can take that (information) and leverage that. It’s taking all their knowledge and data and having more of a laboratory that makes them more money … If I were Kroger, I wouldn’t be sleeping tonight. If they go the high-tech route for non-foods departments and maybe even foods departments, it’ll be a hit.”