Amazon plans to open “dozens of grocery stores in several major U.S. cities,” with the first location in Los Angeles likely to open its doors by the end of the year, according to a Friday report from The Wall Street Journal. If there’s a little question mark floating over your head and you aren’t sure why, it’s because Amazon bought Whole Foods for $13.7 billion just two freakin’ years ago (per CNN).
The onetime online-only bookstore is planning to open a chain separate from the Whole Foods grocery brand with the intent of offering different products at lower prices; according to WSJ, beauty and health items will also be included in the stores. (Partial Foods?) But as CNN highlights, more brick and mortar locations (so revolutionary!) “will also give the company more pickup and delivery points to meet customer demand, help it gain data about shoppers, and introduce its expanded lineup of food and personal care brands, according to analysts.”
If you’re interested in grocery stores or the machinations of monolith corporations, both the CNN and WSJ pieces are worth a read. But to re-state, because this is really wild: One advantage the company has in opening a new brick and mortar grocery chain is to help meet delivery demand. Amazon needs physical grocery stores to meet the demand of online shoppers. Oh, and then it’ll sell more Prime memberships.
Amazon did not comment on the WSJ report.
It’s a bit of an ouroboros situation, right? Online retailer becomes physical retailer to feed online retail business? CNN notes that the stores will be “geared toward pickup as more Americans adopt buying their groceries online and picking them up in stores,” which makes sense. Still weird, though.
Regardless, it would seem other grocery chains are taking the news seriously. Per WSJ, stock prices of other grocery companies like Kroger and Walmart fell, while Amazon shares rose 2 percent.