Amazon's Ambitious Plan to Take Over Grocery

Jeff Bezos has some big plans for Amazon.com’s grocery future. According to Business Insider, the company wants to open 20 brick-and-mortar grocery stores over the next two years, and believes the U.S. market has room for up to 2,000 of its AmazonFresh-branded grocery stores over the next decade. By the end of 2018, Amazon plans to operate 20 locations for a pilot program of its grocery stores in Seattle, New York, Miami, Las Vegas and the Bay Area. Different versions of the stores will be experimented with during this pilot — 10 stores will be “click and collect” drive-ups, and the other 10 will be traditional stores with aisles and carts.

Total Retail's Take: Brick-and-mortar stores are becoming increasingly important to Amazon’s growth strategy, and grocery is a massive $800 billion market. The company is looking to expand beyond its online retailing stronghold, reaching new customers, for example, in bookstores and pop-up shops. Amazon believes that some of its stores will offer enough of a draw to become "destination stores" that consumers are willing to drive across town or even out of town to shop at. However, the physical store strategy is an expensive one, and will put Amazon in unfamiliar territory. The online retailer will now have to compete with the more experienced Wal-Mart and its more than 5,000 U.S. stores.