Amazon’s grocery push is kicking into high gear, according to a new report from The Wall Street Journal.
WSJ reports that Amazon signed leases for more than a dozen sites in the Los Angeles area alone for a new chain of grocery stores. Other early targets for the expansion include Chicago and Philadelphia. No mention of Amazon’s hometown of Seattle in the report.
At roughly 20,000 to 40,000 square feet, these new stores would be much bigger than what Amazon has built in the past. The first few stores will be in dense suburban areas, a departure from the downtown and urban core locations where much of Amazon’s brick-and-mortar portfolio resides. One of the first stores in the new concept will be in the Woodland Hills neighborhood of Los Angeles, where WSJ reports Amazon is listed on permits for renovations of a building that used to be home to a Toys R Us location.
WSJ reports the stores will carry mainstream groceries that won’t compete with Whole Foods. It remains unclear if the company will use the Amazon Go cashier-less checkout technology in the larger stores.
Rumors of a new Amazon brick-and-mortar concept with dozens of locations across the U.S. have percolated for months. Amazon has yet to acknowledge a new store format and declined to comment for this story.
Whole Foods stores make up the vast majority of Amazon’s retail footprint, after the tech giant scooped up the grocer for $13.7 billion in 2017. GeekWire research from last year shows Amazon is approaching close to 600 locations between Whole Foods locations and its other stores.
Today, Amazon has 18 open and announced Amazon Go stores, 19 Amazon Books stores and six Amazon 4-star stores.
Thanks to the growth of its brick-and-mortar portfolio, Amazon now breaks out revenue from those stores. In the most recent quarter, the Physical Stores division accounted for $4.3 billion in revenue, however sales grew by only about $18 million over the prior year, or less than 1 percent. That doesn’t take into account purchases made online and picked up in-store or grocery delivery, meaning sales could be growing faster than the metrics indicate.