Bottom line: Being able to undercut the competition on cost could also give Amazon a leg up on the competition although considering margins are already incredibly thin in this industry, that seems like an unlikely route for Amazon to take if it wants to ensure decent profits.
Amazon is planning to open a new brand of grocery store in California in 2020. Details are sparse but Amazon has confirmed that it won't be affiliated with Whole Foods, the natural foods chain it purchased in mid-2017 for $13.7 billion.
CNET was first to report the news after discovering job postings related to the new store. A spokesperson told the publication that the store won't use Amazon Go technology that enables a cashier-free experience; rather, customers will check out as they do at other grocery stores.
The store will be located in Woodland Hills, a neighborhood in Los Angeles, California. Amazon didn't specify if this would be a one-off test location, nor did it say anything about potential pricing or the selection of products it'll offer.
A new line of grocery stores could be just what the e-commerce giant needs to make new inroads in the massive US grocery market. The company already dabbles in the space with the aforementioned Whole Foods and Amazon Go convenience stores as well as with its Fresh grocery delivery service. Having a local supermarket within reach at a moment's notice could help drive even more business and give grocery leaders like Walmart and Kroger a run for their money.
Masthead credit: Supermarket by robuart