Amazon is planning to expand its presence in the grocery business with a new effort known internally as Project Como.
Sources familiar with the plans tell The Wall Street Journal that Amazon is looking to build small brick-and-mortar convenience stores that would stock common perishable items like milk, produce and meats.
What's more, Amazon may be just weeks away from opening a drive-up grocery store in its hometown of Seattle in which orders placed ahead of time online will be brought out and loaded into customers' vehicles. The company is said to be developing technology to read license plates that would be used to speed up wait times.
The drive-up grocery store will - at least, initially - be limited to subscribers of Amazon's Fresh subscription service. Perhaps in preparation for the upcoming store, Amazon just last week eliminated the $299 annual price of Fresh in favor of a $15 per month fee for standard Prime members.
Nobody has yet cracked the online grocery / delivery puzzle. According to Morgan Stanley Research, groceries account for nearly 20 percent of consumer spending yet online grocery purchases make up just two percent of grocery sales in the US.
There's plenty of money to be made as the Food Marketing Institute says the average household makes more than one-and-a-half grocery store visits each week, spending an average of $107 in the process. Getting goods to online shoppers, however, is tricky as some food must be kept cold. Further complicating the matter are tight delivery windows as couriers can't simply leave several bags of food sitting on your porch if you aren't home.
Amazon declined to comment, the Journal said.