In a quest to become a bigger name in the food industry, Amazon is all set to launch its brand new grocery store in California. The new supermarket is expected to open in 2020 at Woodland Hills, Los Angeles. The company has recently announced new job postings for the location. This grocery store will be quite different from Amazon-owned Whole Foods. However, the company has not yet disclosed any details related to the pricing, selection, and brand name. Amazon might expand its upcoming grocery store to multiple sites. The officials have informed that the new supermarket will not have the company’s Amazon Go Technology, which allows checking out without waiting in line. The customers will have to go through the conventional check out like other grocery stores.
The company has bought Whole Foods for $13.2 billion in 2017. Whole Foods which has 500 stores across the US, offers grocery delivery through Amazon Fresh, Amazon website, Prime Now and Amazon Go. As per sources, other branches of the new supermarket will open in Los Angeles, Chicago, and Philadelphia. The new store is supposed to allow Amazon to venture into the more mainstream grocery business. At the same time, Whole Foods will remain a high-end store for organic and specialty foods. The new supermarket is reported to be situated at old Toys R Us space, which is supposed to be 35000 square feet in size.
The new supermarket aims to thrust Amazon further into an $800 billion US grocery market and compete with Walmart that continues to be the biggest market player. Despite the expansion of Whole Foods, Amazon remains a smaller entity in the grocery business in the United States. Venturing into grocery business is supposed to help the world’s largest e-commerce in many ways. It will reinforce customer loyalty into the brand. It would also enable the company to retain its fast revenue growth, which hovers approximately 20 percent after every quarter despite its massive size. The new Amazon supermarket comes with many risks as well. Amazon will take years to expand new chains of the grocery store. The firm will have to be dependent on the consumers to change their daily habits to attract them to the new stores. The grocery business generally has very thin margins, so there will not be much room for Amazon to cut down on prices to gain much profit.