Amazon Considers Opening C-Stores

As the ecommerce company expands its grocery presence, Amazon is reportedly delving into the convenience store channel. NACS weighs in.

October 12, 2016

SAN FRANCISCO – The Wall Street Journal reports that Amazon may be looking to open convenience stores and drive-thru grocery pick-up sites; however, grocery experts say the moves may be more of a targeted marketing ploy.

“For its planned convenience stores, Amazon is drawing influence from discounters like Aldi and Lidl, as well as dollar stores, which are expanding in the U.S. with spartan stores, private-label inventory and few employees,” reports the Journal. If the plan comes to fruition, it be well over a year or more before these stores open.

USA Today reports that Amazon is not the first large retailer to step into the c-store space, citing Walmart’s now defunct Walmart To Go foray and Tesco’s Fresh & Easy concept in the United States.

Analyst Jim Prevor told USA Today that he sees the rumored Amazon convenience stores as more of a market research effort than a plan for a major roll-out. “There’s no particular advantage to Amazon to open physical stores. I suspect the lofty multiples they get on Wall Street would not be supported if they suddenly announced they were going to spend millions on brick-and-mortar stores,” he said.

From the c-store lens, Amazon doesn’t sell grab-and-go coffee, fountain drinks, tobacco products or prepared foods. In fact, about 83% of all merchandise and foodservice items sold in a convenience store are consumed within one hour or less. And while logistics is an arena Amazon is known for, fresh prepared foods probably don’t appear on many online “wish lists.”

“It’s not to say that they’re not inventing their own category,” Jeff Lenard, NACS vice president of strategic industry initiatives, told USA Today. He also noted that any Amazon convenience store would likely be a very different animal from what most Americans think of c-stores today.