Rollout of Amazon Grocery Stores an Adjunct to Whole Foods
The website cnet.com broke the story today that Amazon confirmed it is hiring people to run its first complete supermarket in California, positioned as a similar store to Whole Foods. The company bought Whole Foods for $13.2 billion in 2017.
“Amazon is opening a grocery store in Woodland Hills in 2020,” an Amazon spokesperson confirmed to CNET on Monday morning, soon after the company published four new jobs postings for the location. Woodland Hills is a neighborhood in Los Angeles.
The store will be different from Whole Foods, Amazon said. It didn’t say whether it will open more of these locations, what its selection or pricing will be, or what the brand name is. But in the jobs postings, the company described the Woodland Hills location as “Amazon’s first grocery store,” suggesting that it will have the Amazon brand name and that the company could expand to multiple sites.
The store won’t use the Amazon Go technology. Instead, Amazon seeks to enter the highly competitive grocery field and dominate the high end of the market as a traditional operator. So far Amazon Go and Amazon Books stores have yet to turn a profit. Amazon plans to continue to invest in grocery delivery for Whole Foods stores and for its own stores.
Cnet speculates that the move is an attempt to expand Amazon’s market share further to boost profits.
It reinforces customer loyalty because people tend to shop at a local store every week and it could allow the company to continue its fast revenue growth, which typically hovers around 20% every quarter despite its massive size.
Here’s a video of Amazon’s convenience market, which was in a test phase nearly two years ago, but apparently did not win over consumers.