Amazon To Expand Whole Foods: Is AmazonFresh Strategic? Will Amazon Acquire A Grocery Distributor?

According to the Wall Street Journal, Amazon is planning to build and expand Whole Foods stores across the U.S. to put more customers within range of the e-commerce giant’s two-hour delivery service. The push would bring Whole Foods to more suburbs and other areas where the natural grocer is quickly adding customers since the merger according to the WSJ. 

The report by the WSJ contains information similar to what I have written in multiple articles for Forbes related to Amazon and it's grocery ambitions.

For example, consumers prefer to buy groceries inside grocery stores. In order to become a major player in groceries, Amazon must increase its store count. Online grocery sales account for only 2% of all sales. Regardless of the popularity of the topic, online sales of groceries remain statistically insignificant.

A recent article I wrote about Whole Foods outlined that Amazon has multiple options for expanding the size of Whole Foods. Among the options listed were Amazon acquiring Target and opening Whole Foods Markets inside Targets' stores, or investing capital to build and/or lease stores.

Based on my research, I estimate that Amazon can build a total of 2000 Whole Foods Markets in the U.S. and up to 1,000 Whole Foods 365 stores. Amazon can build up to 5,000 AmazonGo stores and between 1,000 to 1,500 AmazonFresh Pickup locations. The numbers are not an exact science, they are estimates only. However, the numbers indicate that Amazon has the option to build or lease a large number of stores of various retail formats to delight customers.

Amazon has the option of building stand-alone locations or partnering with one or more retailers to create a multi-use retail experience. I've been a supporter of Amazon partnering with Kohl's to build a combination Whole Foods and Kohl's retail format that will allow Amazon to showcase Whole Foods, and also display and rotate its private label products and electronics. Kohl's can display its merchandise and introduce other sections strategic to its needs. Amazon can partner with Best Buy on a similar concept.
Source: https://www.forbes.com

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