Amazon could be on a path to grocery market dominance
James Melton|
If Amazon.com Inc. plans to expand its grocery store footprint aggressively, it’s safe to assume Amazon’s ambitions reach far beyond the scale of its $13.7 billion acquisition of Whole Foods Market in 2017. Amazon wants nothing less than domination of U.S. food sales, analysts say.
“Amazon only enters categories and makes acquisitions that it can scale,” says Brittain Ladd, a former Amazon executive and now a strategy and supply-chain consultant for large grocery store operators. “Amazon didn’t enter the grocery category to only control a small percentage of the $840 billion grocery industry. Amazon wants to become the leader in meeting customer demand for food.”
According to a Friday report in The Wall Street Journal, Amazon plans to launch a grocery chain in Los Angeles as early as the end of 2019 and is in talks to open locations in shopping centers in San Francisco, Seattle, Chicago, Washington D.C. and Philadelphia. Amazon also is looking into acquiring regional grocery chains to help it ramp up the new chain quickly, according to the article. An Amazon spokeswoman declined to comment on the report.
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