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Amazon intends to open dozens of grocery stores in many major US cities separate from the Whole Foods brand, sources told The Wall Street Journal.
Business Insider Intelligence
The company plans to open its first location in Los Angeles, potentially before the end of this year, and it’s signed leases for two more locations that would open in early 2020, though signing leases doesn’t mean Amazon will definitely open these stores.
The e-commerce titan is also considering acquiring regional grocery chains that have approximately 12 stores, which would speed up its expansion, and it’s in additional talks to open stores in shopping centers in five different US cities. It’s currently unclear if the new chain will include Amazon branding.
The new chain gives Amazon the chance to offer lower-price products than Whole Foods and create stores with online grocery in mind. These new stores can offer cheaper and less upscale products than what’s typically seen at Whole Foods, allowing Amazon to avoid cannibalizing Whole Foods’ sales, dodge hurting the grocer’s reputation by changing its selection, and cater to different consumers.
Additionally, Amazon can build and format these new stores with online grocery orders, both pickup and delivery, in mind so it can set them up to succeed in the online grocery industry, which it’s long been a major player in. Business Insider Intelligence will have further coverage of this news later today.
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