Report: Amazon developing bulk food delivery service to rival Costco, Sam’s Club

amazonsignage2According to a report by USA Today, Amazon is working on a service called Pantry, which will allow Prime subscribers to fill a pre-sized box from a selection of products and–assuming they don’t go over a weight limit–have that box shipped to them for a flat fee. Citing anonymous sources, USA Today said that Billy Hegeman, a senior manager in vendor management and consumables, is heading up the project, which will launch sometime in 2014.

The product selection for Pantry won’t be new for Amazon. The report says that at least at first, Pantry will be focused on items that are typically found in the central aisles of grocery stores: cereal and other dry goods, canned food, paper towels and some beverages, which are all things the company already sells á la carte.

It seems like a logical move for Amazon, which continues to expand its grocery offerings, and launched AmazonFresh service in San Francisco earlier this week.

The Pantry program would be an excellent way for Amazon to showcase private label consumables, which the company is rumored to be working on.

It also has the potential to be a major threat to Costco and Sam’s Club, which charge annual membership fees for the chance to shop inside a warehouse for bargain-basement prices.

Amazon’s system, as described, would have a key advantage over big-box warehouse stores: it’s possible to buy in bulk from Amazon without having to get in the car, drive all the way to a massive warehouse, and then wander the aisles hoping to pick up a five pound bag of trail mix and an 18-pack of paper towels.

Amazon declined to comment on the report.