A report today from the Wall Street Journal claims Amazon plans to open a new grocery US grocery chain that would be separate from Whole Foods, which was purchased by Amazon in 2017 for roughly $13.5 billion. According to the WSJ article:
Amazon.com is planning to open dozens of grocery stores in several major U.S. cities, according to people familiar with the matter, as the retail giant looks to broaden its reach in the food business. First grocery store in Los Angeles as early as the end of 2019. Amazon has already signed leases for at least 2 other grocery locations with openings planned for early next year, this person said.
The new stores would be distinct from the company’s upscale Whole Foods Market brand, though it is unclear whether the new grocery chain would carry the Amazon name.
Amazon is also exploring an acquisition strategy to widen the new supermarket brand by purchasing regional grocery chains with about a dozen stores under operation, one person said.
Amazon is now in talks to open grocery stores in shopping centers in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, the people familiar with the matter said.
While Amazon has already signed leases, that doesn’t guarantee it will open the grocery stores. Retailers sign contracts and then pull out or delay store openings if certain conditions aren’t met.
The new stores aren’t intended to compete directly with Whole Foods and will offer products at a lower price point, these people said. The new chain would offer a different variety of products than what is on the shelves at the more upscale Whole Foods stores.
UFCW International President Marc Perrone responded with the following statement warning of the dire impacts Amazon’s move to take over the grocery industry could have for everyday Americans:
“Make no mistake, Amazon’s new and ruthless supermarket strategy is its latest salvo bent on destroying good American jobs to enrich one billionaire – Jeff Bezos.
Amazon isn’t about providing better food or customer service, and it certainly is not about fair competition. Launching this grocery chain is an aggressive expansion of Amazon’s market power as it seeks to fundamentally change our country’s food retail and service economy while eliminating as many retail workers as possible.
It is time that Republicans and Democrats realize that Amazon’s predatory business model is wrong for this nation and will needlessly destroy millions of jobs in every state in this country. Our leaders need to stop fawning over Jeff Bezos’ wealth and wake up to the serious threat Amazon’s business model poses to consumers, the economy, and our society.”
The UFCW has been calling for more scrutiny to be given to Amazon’s impact on the grocery industry since their announcement of the Amazon Go stores in 2016.