More Talk of a Second Grocery Chain for Amazon

Potential new stores may combine online and traditional shopping.

July 30, 2019

SEATTLE—Amazon wants to create a grocery chain separate from Whole Foods, according to Business Insider. The new operation would combine traditional shopping with online ordering and mark another push by Amazon to dominate the grocery shopping space.

The $13.7 billion Whole Foods acquisition in 2017 advanced Amazon’s presence in the grocery market but didn’t satisfy the company’s vision for overhauling the supermarket shopping experience. The report cites areas in which Amazon has struggled to cut Whole Foods’ prices and incorporate the grocery chain into its delivery system.

In March, The Wall Street Journal reported that Amazon plans to open dozens of grocery stores in the United States, with the first outlet scheduled for Los Angeles before year end. Amazon has signed leases for at least two additional, but unidentified, locations.

During the past few months, Amazon also has posted several job openings for store designers, but the company did not immediately respond to Business Insider’s request for a comment. Here is what is known about Amazon’s grocery plans based on recent reports:

The Amazon grocery stores could combine in-store shopping and online ordering. The company would prefer to build new stores from the ground up rather than expanding Whole Foods, according to The New York Times. These stores would focus on pickup and delivery and include a separate section where shoppers could pick out fresh groceries.

The Times cites an Amazon memo from 2017 that outlines the company’s vision for upending the grocery shopping experience. The memo describes a store concept that would let shoppers order nonperishable items through an app as they roamed the aisles to pick out fresh groceries. The nonperishable items could include staples such as paper towels and canned foods, and they would be brought to the checkout area as the customer shops. The supermarket would have a designated area to pick up online grocery orders. Based on reports from the Times and the Journal, it sounds like the new grocery operation may be inspired by that memo. 

Amazon’s new chain is likely to be separate from Whole Foods, and the stores’ size would be smaller, reports from both the Journal and the Times indicate. To differentiate its new chain from Whole Foods, Amazon may offer a different selection of products at a lower price point.