Leaked Amazon documents reveal plans to open grocery stores

Monday, November 14, 2016 by: J. D. Heyes
Tags: Amazon, Jeff Bezos, grocery stores

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(NaturalNews) Amazon.com founder Jeff Bezos literally wants to dominate every commercial transaction you make, which is one of the driving principles behind his gigantic online retail empire, where you can find and buy almost anything on earth.

Now, Bezos wants to dominate your food purchases as well. Should one man have so much power?

As reported by Business Insider, whether he should or not, he's about to obtain it. According to documents the website obtained, Amazon is planning to open 20 brick-and-mortar grocery stores over the next two years, and the online retail behemoth believes there is room in the country for as many as 2,000 more over the course of a decade.

The company wants to operate a 20-location pilot Amazon Fresh-branded store program by the end of 2018, the documents show. Locations include Seattle, Las Vegas, New York City, Miami and the San Francisco Bay area, Business Insider noted, citing the documents.

In addition, Amazon would like to experiment with differing versions of its stores during the pilot program. For instance, 10 of the locations will be "click-and-collect" drive-up stores, where Amazon customers will simply pick up orders they placed online. But the other 10 stores will be more traditional, where shoppers will push carts and stroll up and down aisles, smelling and inspecting produce and other products.

$800 billion a year industry

Business Insider reported that the documents it inspected expose Amazon's broad plans for the grocery stores, although it is possible that the online retailer could pull back or scale down its plans depending on the market and business conditions.

Though the Amazon brand was built solely online, physical stores are becoming increasingly integral to the company's business plans and ambitions, as it attempts to move beyond its Internet-based model to reach new customers. In addition to groceries, Amazon has already opened a few bookstores and is currently building a network of pop-up stores in malls in order to showcase a line of hardware products.

That said, building and maintaining physical locations is expensive, and the effort to nudge into the $800 billion-a-year grocery market will pit Amazon against much more experienced companies like Walmart, which currently boasts more than 5,000 stores across the U.S., as well as a fairly robust online business.

But as Amazon has started moving into the massive grocery market, it has taken a fairly measured approach. For example, it's Amazon Fresh grocery delivery service has not grown much after rolling out in just 17 U.S. cities and one overseas location, London, nearly 10 years after being launched in 2007. Plans for these new stores, however, appear to indicate that Amazon is ready to move more quickly to expand into the grocery market.

Grocery market is tough, but Amazon seems poised to enter it anyway

The move makes sense though, from the company's point of view. Business Insider reported that Amazon has been analyzing the physical grocery store market concept very closely over the past few years. "An internal market research report from 2014 that was updated earlier this year focused not only on sales data from Amazon's Fresh and Prime delivery services but on market data from competing grocery stores," the site noted.

The online retail giant has struggled with one important aspect of the new venture: whether or not to open up physical grocery stores to the public or just to members of its Prime Fresh club, who pay a $15 fee every month to have their groceries home-delivered.

While the U.S. grocery market is massive, it can also be tricky, Business Insider noted, because of its historically thin profit margins and high operating costs. If it goes membership only, Amazon may be able to offset high operating costs with guaranteed income from the fees.

Either way, Bezos – who also wants to dominate the "final frontier" of space travel – seems intent on dominating as much of our lives as possible.

Sources:

BusinessInsider.com

BusinessInsider.com

Space.com