Amazon Online Grocery Stores Coming Soon
Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.
SAN FRANCISCO – AmazonFresh Coming to a City Near You?
Amazon.com is planning a major roll-out its online grocery business, AmazonFresh. Amazon has been quietly developing its grocery business for years, targeting one of the largest retail sectors yet to be upended by e-commerce.
The company has been testing AmazonFresh in its hometown of Seattle for at least five years, delivering fresh produce such as eggs, strawberries and meat with its own fleet of trucks.
Amazon is now planning to expand its grocery to Los Angeles this week and the San Francisco Bay Area later this year. Depending on their success, the company may launch AmazonFresh in 20 other urban areas in 2014, including some outside the United States.
Bill Bishop, a prominent supermarket analyst and consultant, said the company was targeting as many as 40 markets, without divulging how he knew of Amazon’s plans. –Yahoo.com
Amazon’s expansion plans are a potential threat to grocery chains such as Kroger Co, Safeway Inc and Whole Foods Market, as well as general-merchandise retailers Wal-Mart Stores Inc and Target Corp, which also sell a lot of groceries.
“Amazon has been testing this for years and now it’s time for them to harvest what they’ve learned by expanding outside Seattle,” said Bishop, chief architect at Brick Meets Click, a consulting firm focused on retail technology.
“The fear is that grocery is a loss leader and Amazon will make a profit on sales of other products ordered online at the same time,” he said. “That’s an awesomely scary prospect for the grocery business.” –Yahoo.com
If AmazonFresh is successful, Amazon may be able to develop its own broad-based delivery service to deliver directly to homes, which could negatively impact UPS, FedEx and other package delivery companies that currently ship Amazon goods.
Roger Davidson, a former grocery executive at Wal-Mart and Supervalu, said Amazon will struggle to make money from AmazonFresh because fresh produce can easily go out of date in storage warehouses and get damaged during delivery – something known as “shrink” in the business.
“Will it work? I would bet against it,” Davidson said. “The reasons these businesses have failed in the past have not gone away.”
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