Amazon’s grocery stores under construction in its hometown are just the start of a much larger vision.
That’s the word from Business Insider, which says it has viewed internal Amazon documents outlining a plan to start with a 20-location pilot for Amazon Fresh-branded grocery stores in areas including Seattle, Las Vegas, New York, Miami and the Bay Area. Half the pilot stores will be drive-up locations for picking up online orders, while the other half will be traditional stores where shoppers can browse for items.
Beyond the pilot, the internal documents reveal that Amazon sees room in the U.S. for up to 2,000 of its AmazonFresh-branded grocery stores over the next decade, according to the report by Business Insider’s Eugene Kim. By comparison, Walmart has more than 5,000 stores in the United States.
We’ve contacted Amazon for comment on the report. The company declined to comment to Business Insider, and has yet to say anything publicly about its plans in Seattle or elsewhere.
GeekWire previously discovered two Amazon drive-up locations under development in Seattle, in the Ballard and SoDo neighborhoods, based on clues in planning documents. In addition, we found a 2013 article by Brittain Ladd that lays out the case for AmazonFresh to expand into brick-and-mortar retail. Ladd, with Deloitte at the time he published the article, was later recruited to Amazon, where he works on the global expansion of Fresh.
The Wall Street Journal has reported that Amazon plans to introduce “convenience stores” in addition to drive-up locations. According to the Business Insider report, the browse-and-buy stores would be up to 30,000 square feet. That’s much larger than the typical 7-Eleven, which is around 3,000 square feet. Amazon’s drive-up locations would be about 10,000 square feet, according to Business Insider.
Bloomberg reported that the first Amazon stores in Seattle could open by the end of the year.
Amazon also plans two drive-up grocery stores in the San Francisco Bay Area, according to the Silicon Valley Business Journal.
Business Insider reports in its story, “If the 20-store pilot program is successful, Amazon envisions opening as many as 2,000 ‘multifunction’ stores across the US over the next 10 years. The total number of grocery stores has not been finalized and could change, but the documents refer to a proposed launch schedule of 200 stores a year, all supported by a new generation of distribution centers to replenish inventories.”
This is part of broader efforts by Amazon to experiment with the economics of the grocery business and physical retail. Amazon recently dropped the price of an AmazonFresh subscription to $15/month, from $299/year previously. AmazonFresh customers must also belong to the Amazon Prime membership program, and pay a delivery fee on orders of less than $40. The company this week expanded AmazonFresh to new markets including Chicago and Dallas. AmazonFresh dates back to a 2007 pilot in the Seattle region.
The company opened its first brick-and-mortar bookstore in Seattle last year.
Amazon reports quarterly earnings after the market closes later today — stay tuned for full coverage on GeekWire.