Report: Amazon planning to open new (non Whole Foods) grocery stores

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Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by Brian Lutz » March 1st, 2019, 1:16 pm

https://www.wsj.com/articles/amazon-to- ... yURL_share

According to this article, Amazon is leasing grocery store properties in various cities, and plans to a store in Los Angeles by the end of 2019. Rumors point to stores being opened in Seattle, Chicago, DC and Philadelphia as well. These would not be Whole Foods stores, but would be branded differently and generally be priced lower.

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by marshd1000 » March 1st, 2019, 3:21 pm

In the article I read, it made it sound like Amazon would be interested in buying regional chains. But I am thinking that it could be interesting if Kroger and Amazon merged. Kroger has the footprint. Plus Amazon possibly could meld well with Fred Meyer and Kroger’s Marketplace concepts. But possibly the FTC could squash that!

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by storewanderer » March 2nd, 2019, 12:21 am

Amazon has not done a particularly good job with Whole Foods. They seem to be backtracking on expansion of corporate offices in certain cities using politicians who I do not endorse or support even remotely as scrapegoats for why they are backtracking. I suspect there is more to the story. I do not see them as much of a threat to grocers. Retailers are more of a self-threat, than Amazon is. Mismanaged retailers that are overly leveraged are the ones worrying about Amazon and the ones going bankrupt. Well managed retailers that have a clear strategy and properly take care of their customers are not worrying about Amazon. Unfortunately, there are not many of those "well managed retailers." Kroger was one under the old CEO Dillon. WinCo is still one.

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by pseudo3d » March 2nd, 2019, 9:12 am

marshd1000 wrote:
March 1st, 2019, 3:21 pm
In the article I read, it made it sound like Amazon would be interested in buying regional chains. But I am thinking that it could be interesting if Kroger and Amazon merged. Kroger has the footprint. Plus Amazon possibly could meld well with Fred Meyer and Kroger’s Marketplace concepts. But possibly the FTC could squash that!
There really aren't that many strong regional chains left anymore for the picking, not unless Amazon went after Albertsons or Kroger, or got one of the big private ones (Publix, HEB, etc.) to sell out. Furthermore, most of Amazon's core markets...the big cities, are the hardest to crack, and you'd need at least 5-10 stores to really make a meaningful impact. Knowing Amazon, they'll probably make some F&E-sized "Amazon Fresh" stores in a handful of select cities, then end up closing them. If they wanted to continue what they were doing, then they should re-tool 365 as a more "traditional" grocery store, but even then they'll be facing an uphill battle with few stores with little standard departments (even a pharmacy).

I can even see a situation where they might dismantle or sell Whole Foods entirely.

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by storewanderer » March 2nd, 2019, 9:45 am

pseudo3d wrote:
March 2nd, 2019, 9:12 am
marshd1000 wrote:
March 1st, 2019, 3:21 pm
In the article I read, it made it sound like Amazon would be interested in buying regional chains. But I am thinking that it could be interesting if Kroger and Amazon merged. Kroger has the footprint. Plus Amazon possibly could meld well with Fred Meyer and Kroger’s Marketplace concepts. But possibly the FTC could squash that!
There really aren't that many strong regional chains left anymore for the picking, not unless Amazon went after Albertsons or Kroger, or got one of the big private ones (Publix, HEB, etc.) to sell out. Furthermore, most of Amazon's core markets...the big cities, are the hardest to crack, and you'd need at least 5-10 stores to really make a meaningful impact. Knowing Amazon, they'll probably make some F&E-sized "Amazon Fresh" stores in a handful of select cities, then end up closing them. If they wanted to continue what they were doing, then they should re-tool 365 as a more "traditional" grocery store, but even then they'll be facing an uphill battle with few stores with little standard departments (even a pharmacy).

I can even see a situation where they might dismantle or sell Whole Foods entirely.
I too wonder what "strong regional chains" of 10-12 conventional grocery stores are out there that Amazon would go after. Seems like some sort of a pipe dream. Maybe there are more back east? There are some little pockets of independents with a few stores each that tend to be successful. But I am at a loss to even cite a strong regional chain of 10-12 locations. Gelson's in SoCal? But that isn't a conventional... Harmon's in Utah... really doubt that family would sell, their effort in their stores is 200% and all you have to do is walk one of their stores to see they like what they are doing.

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by klkla » March 2nd, 2019, 9:48 am

pseudo3d wrote:
March 2nd, 2019, 9:12 am
I can even see a situation where they might dismantle or sell Whole Foods entirely.
Why would they do that? Whole Foods is a well established brand with a customer base that is willing to spend a lot of money. They would be foolish to do that IMO.

They recently announced that they are discontinuing the 365 brand altogether. They would need to remodel them if they want to make them tradition Whole Foods stores. I wonder if these existing stores will be converted to this new grocery format?

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by storewanderer » March 2nd, 2019, 10:05 am

klkla wrote:
March 2nd, 2019, 9:48 am
pseudo3d wrote:
March 2nd, 2019, 9:12 am
I can even see a situation where they might dismantle or sell Whole Foods entirely.
Why would they do that? Whole Foods is a well established brand with a customer base that is willing to spend a lot of money. They would be foolish to do that IMO.

They recently announced that they are discontinuing the 365 brand altogether. They would need to remodel them if they want to make them tradition Whole Foods stores. I wonder if these existing stores will be converted to this new grocery format?
We will see soon. The 365 in South Lake Tahoe was about to open back when they announced they were shelving the 365 format.

I assume they will be doing some change orders before opening.

I don't think Amazon knows what it is doing with the grocery business. Whole Foods has declined considerably under their watch (cannot believe the produce situation there now) and prices there are higher than ever. I know a number of people who used to always shop Whole Foods and loved to word drop it. They don't shop there often anymore and don't word drop it. They were and still are in a financial position to overpay for groceries. The reputation of the chain has fallen under Amazon.

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by klkla » March 2nd, 2019, 1:50 pm

storewanderer wrote:
March 2nd, 2019, 10:05 am
Whole Foods has declined considerably under their watch (cannot believe the produce situation there now) and prices there are higher than ever. I know a number of people who used to always shop Whole Foods and loved to word drop it. They don't shop there often anymore and don't word drop it. They were and still are in a financial position to overpay for groceries. The reputation of the chain has fallen under Amazon.
That's too bad. I haven't been in one of their stores in a while. I will have to check out the one downtown LA which is closest to me and see how it hads changed. I didn't like it that much before Amazon (they didn't carry spices !?!?!?).

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by storewanderer » March 2nd, 2019, 8:11 pm

Not much has changed under Amazon other than a decline in produce quality and significantly increased prices.

They do sell spices though. I couldn't say where they are in my local store, but I have a container of some vague 365 Brand Organic Spice sitting around that I got at Raleys on markdown (must have been a mis-ship).

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Re: Report: Amazon planning to open new (non Whole Foods) grocery stores

Post by pseudo3d » March 2nd, 2019, 9:46 pm

storewanderer wrote:
March 2nd, 2019, 8:11 pm
Not much has changed under Amazon other than a decline in produce quality and significantly increased prices.

They do sell spices though. I couldn't say where they are in my local store, but I have a container of some vague 365 Brand Organic Spice sitting around that I got at Raleys on markdown (must have been a mis-ship).
Yes, at least the 365 sells spices in 365 brand (and I do remember that they had that brand at WFM too). 365 was a place to purchase spices where I lived before the new H-E-B opened, as Kroger's selection lacked McCormick and either had the Kroger-brand metal containers or outrageously priced Spice Islands spices. :roll:

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