How will they compare to Whole Foods and Trader Joe's?

By Jelisa Castrodale
October 08, 2019
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"People really need to understand—Whole Foods is the beginning, it's not the end," a former Amazon grocery operations worker told The New York Times in 2017. "It's not everything." That was the year that Amazon dropped $13.4 billion to buy the Whole Foods chain, and it was also the year that an internal memo started to circulate, one that detailed some of the features that a new supermarket chain—presumably one operated by Amazon—might have.

Although the Seattle-based retail behemoth has opened more than a dozen Amazon Go cashier-less convenience stores, complete with a limited selection of groceries, fresh and prepared foods, and other basics, it hasn't gone Full Grocery Store yet—and yet is the key word in that sentence. 

According to the Wall Street Journal, Amazon is planning to launch its grocery stores in the United States, starting with three locations in California that could open before the end of the year. An unnamed source told the Journal that the company had signed "more than a dozen leases" in the Los Angeles area, but the first three stores are expected to be in Woodland Hills, and Studio City, along with the Orange County city of Irvine.

Some of the other cities that are reportedly being considered include Chicago, Connecticut, New York, New Jersey, and Philadelphia.

There's little solid information about what the supposed supermarkets will look like: no one seems to know whether they'll be cashier-less like the Go stores, or even what they'll be called. The stores are expected to be about 35,000 square feet (the Woodland Hills Amazon store is located in what used to be a Toys 'R' Us). That's roughly 25,000 feet smaller than the average grocery retailer and about 10,000 feet smaller than the average Whole Foods, but double the size of a typical Trader Joe's.

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The company reportedly also hopes to have a wide range of products—health and beauty products were the examples a source previously mentioned—in addition to prepared foods and "mainstream groceries." Speaking of Trader Joe's, with a range of house brands under Amazon's umbrella, it's possible the new store concept could take a play out of the books of TJ's, Aldi, and Lidl by limiting much of its food selection to its own private labels like Wickedly Prime and Happy Belly.

Amazon has declined to comment on the details this unidentified person shared; a spokesperson said that the company "doesn't comment on rumors or speculation"—which is the same word-for-word statement that it gave the Times in 2017.

That memo cited by the Times said that Amazon would need more than 2,000 stores "to be a major grocery player," which is significantly fewer than Walmart or Kroger have, but more than Publix. As of this March, there were 500 Whole Foods stores, and its website says that stores in Beverly, Massachusetts and west Seattle are "coming soon."

If you add those two to the total, along with the 15 existing Amazon Go stores, that means it just has 1,483 stores to go. Stay tuned…

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