Stock prices of several prominent grocery store companies in the United States sharply fell following reports that Amazon is planning to open up its own chain of supermarkets. Amazon already owns and operates Whole Foods, a supermarket chain that exclusively sells organic products and the only USDA Certified Organic grocer in the country. However, new reports have revealed that the company plans to expand its reach through the creation of a new grocery brand to compete with large retail supermarkets.
According to a report from The Wall Street Journal, Amazon is apparently planning to open its own grocery stores that will be selling products at a lower price than is Whole Foods stores. Amazon is reportedly working to launch dozens of stores in the United States, with the first one scheduled to open by the end of the year somewhere in Los Angeles, California. Stock prices of companies like Kroger, Costco, Sprouts, and Walmart, immediately reacted following the spread of the news.
It is not yet clear what the name of the new stores will be, but reports have indicated that it will be completely separate from the Whole Foods brand. Additionally, the company is reportedly going to be opening most of its stores inside shopping centers based in countries such as Philadelphia, Chicago, Seattle, and Washington DC. Reports have also revealed that the stores will be a bit smaller than other grocery stores, with an average area of only 35,000 square feet.
There are also reports circulating that Amazon may be looking into acquiring an existing chain, which might further escalate its expansion into the particular industry. This strategy had previously worked for the company when it acquired Whole Foods for US$13.4 billion in 2017. The purchase was seen by some as a direct move by Amazon to get into the brick-and-mortar retail market.
Despite being a digital company, Amazon has had its fair share of efforts in getting into the physical market. The company previously launched its Amazon Go convenience stores, which are basically brick-and-mortar automated locations where customers can pick up their goods without using physical money or going through cashiers. Amazon also owns and operates a chain of retail bookstores called Amazon Books. The company currently has 17 bookstores, with plans to open more stores in other locations around the United States.
When directly asked about their alleged plans to open up their own supermarket chain, Amazon representatives have so far declined to comment on the matter.
