Washington-based Amazon.com, Inc. plans to open dozens of grocery stores across the United States as it looks to expand in the food business, the Wall Street Journal (WSJ) reported.
Amazon is also exploring a strategy of strengthening its new supermarket brand by purchasing regional grocery chains that operate at least a dozen stores, according to the report.
Shares of grocers such as Walmart were down 0.99 percent while Costco traded up 0.21 percent up. Kroger traded down over 4 percent. Amazon was up 1.68 percent.
Amazon, which bought the Whole Foods chain for $13.7 billion in 2017, is now in talks to open grocery stores in shopping centers in San Francisco, Seattle, Chicago, Washington, D.C. and Philadelphia, according to the WSJ report.
The online retail giant plans to open its first store in Los Angeles as early as the end of the year, and has already signed leases for at least two other grocery locations with openings planned for early next year, the Journal reported. The new stores were not intended to compete directly with Whole Foods.
Amazon declined to comment.
“We’re not surprised,” said David Bujnicki, in charge of investor relations at New York-based Kimco Realty Corp., an owner or manager of 437 mostly grocery-anchored shopping centers.
Amazon is slow but deliberate when rolling out new brick and mortar concepts, he said. He added that a new grocer would validate the need for physical stores, a business that has been hit hard by e-commerce, whose surge Amazon has led.
