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New grocery store business coming from Amazon?

WSJ: E-tail giant signs leases, eyes small-chain acquisitions

Russell Redman

March 2, 2019

2 Min Read
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Amazon.com Inc. aims to launch a new retail grocery store business separate from its Whole Foods Market subsidiary, The Wall Street Journal reported.

Seattle-based Amazon already plans to open a grocery store in Los Angeles as soon as this year, and the company has inked leases to open two other locations in early 2020, the Journal said Friday, citing anonymous sources.

WholeFoods-SantaClara3_0.pngAccording to the report, Amazon also is in discussions to open grocery stores at shopping centers in San Francisco, Seattle, Chicago, Philadelphia and Washington, D.C.

In addition, sources told the Journal that Amazon is mulling potential acquisitions of grocery retail chains with around a dozen stores.

“Amazon doesn’t comment on rumors or speculation,” Amazon said in a statement on Friday.

The stocks of grocery retail players dipped upon the news, as has been the case since Amazon unveiled its $13.7 billion deal to acquire Whole Foods in June 2017, and subsequent speculation that it would enter other retail arenas such as pharmacy. In afternoon trading, shares were down about 5% for The Kroger Co., 1% for Walmart and 1.3% for Sprouts Farmers Market.

With the Whole Foods acquisition, Amazon made it clear that it would pursue an omnichannel strategy incorporating brick-and-mortar retail stores. The company has been rolling out its Prime Now online grocery delivery and pickup program to Whole Foods stores since early last year. Prime Now is now available from Whole Foods stores in 63 cities for delivery and 22 markets for pickup.

Related:What’s coming up next from Amazon?

Whole Foods’ store count has climbed by about 30 units since the closing of its acquisition by Amazon in late August 2017. At the time, Whole Foods had 468 stores overall. The Austin, Texas-based grocery chain said this week that it plans to open its 500th store April 5 in Atlanta.

Though not a direct competitor to supermarkets, the cashierless Amazon Go convenience store format is also seen as a threat to brick-and-mortar food retailers. Amazon now operates a total of 10 Go stores in Seattle, San Francisco and Chicago, where the latest location was opened. The company also has confirmed that it plans to open an Amazon Go store in New York City but hasn’t provided details. Published reports have said that Amazon Go outlets may pop up in new types of locations such as airports and grow to as many as 3,000 outlets over the next several years.

In January, e-commerce specialist Edge by Ascential predicted a major grocery expansion by Amazon, saying that 2019 could be the start of when “grocery finally hits” for the company. Edge said Amazon’s grocery sales surged 45% in 2018, though that was less than the nearly 60% growth in 2016-2017.

Related:Report: Amazon Go could become $4 billion business

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About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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