Amazon reportedly has an ambitious plan to change the way we grocery shop — and it’s much bigger than its acquisition of Whole Foods (AMZN)

Business Insider

Amazon is looking into creating a new grocery chain that would likely be separate from Whole Foods, according to The New York Times.
This new chain would blend aspects of online ordering and traditional shopping, and may be inspired by a 2017 internal memo circulated ahead of the Whole Foods acquisition.
The report also describes certain areas in which Amazon has struggled to integrate with Whole Foods, such as when it comes to cutting prices and incorporating the upscale grocer into its delivery system.
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Amazon is brainstorming a new type of grocery store that would combine traditional shopping with online pickup, according to The New York Times. Such a move would mark another push by Amazon to establish dominance in the grocery shopping space following its $13.7 billion acquisition of Whole Foods in 2017.

The online retail giant is looking into building new grocery stores from the ground up rather than significantly expanding Whole Foods, the report says. These new stores would be centered on pickup and delivery, and would include a separate section where shoppers could pick out fresh groceries.

The report cites an Amazon memo circulated in early 2017 before it acquired Whole Foods that outlines the company’s vision for upending the grocery-shopping experience. The memo described a concept for a store that would allow shoppers to order nonperishable items through an app as they roamed aisles to pick out fresh groceries. These nonperishable items, which could include staples like paper towels and canned foods, would be brought down to the checkout area as the customer shops, and the supermarket would also have a designated area to pick up groceries ordered online.

While many of the specifics around Amazon’s grocery chain plans remain unclear, the report likened this hybrid approach to the 2017 memo. Amazon has also posted several job listings for store designers over the past few months. One recent posting, which the Times first spotted, is seeking a candidate to join a team that is "developing creative solutions" for a "retail concept" that houses "multiple customer experiences under one roof."

Amazon did not immediately respond to Business Insider’s request for comment.

The Whole Foods acquisition certainly furthered Amazon’s presence in the grocery market, but it has not satisfied the company’s vision for overhauling the supermarket shopping experience, according to the Times. The report cites several areas in which Amazon as struggled in its efforts to cut Whole Foods’ prices and incorporate the grocery chain into its delivery system.

For example, Amazon had expressed interest in offering popular items at low prices on a daily basis, but this has been difficult considering many items are seasonal and become more expensive in the off-season period. Whole Foods stores also generally have smaller stockrooms than other grocery chains since they sell so many fresh items. That means items for online orders have to be picked from the shelves where store patrons shop, the report notes.

It’s not the first time we’ve heard of Amazon’s reported plans to build its own grocery chain that could be separate from Whole Foods and its Amazon Go cashierless convenience stores. In March, The Wall Street Journal reported that Amazon is planning to open dozens of grocery stores in the United States, with the first store potentially opening in Los Angeles by the end of the year. That report, however, did not get into the details of Amazon’s vision for blending traditional shopping with online ordering.

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Source: Business Insider – leadicicco@businessinsider.com (Lisa Eadicicco)