Report: Amazon to Open Small Brick-and-Mortar Grocery Stores

GroceriesAccording to a WSJ report, Amazon.com, Inc. (NASDAQ:AMZN) will soon open convenience stores and curbside pickup locations as the retail giant delves deeper into the grocery world.

From the Wall Street Journal:

The Seattle company aims to build small brick-and-mortar stores that would sell produce, milk, meats and other perishable items that customers can take home, these people say. Primarily using their mobile phones or, possibly, touch screens around the store, customers could also order peanut butter, cereal and other goods with longer shelf lives for same-day delivery.

For customers seeking a quicker checkout, Amazon will soon begin rolling out designated drive-in locations where online grocery orders will be brought to the car, the people said. The company is developing license-plate reading technology to speed wait times.

The move once again pits Amazon directly up against fellow retail giant Wal-Mart, as many of Wal-Mart’s thousands of retail locations include full or partial grocery stores. Amazon has also been taking a chunk out of Sam’s Club and Costco subscription businesses.

Shoppers can expect Amazon’s new grocery service in densely-populated urban areas first. Amazon plans to roll the service out to customers who are already ordering groceries using its existing grocery services:

The grocery stores, known internally as Project Como, are for now slated exclusively for customers of its Fresh subscription service, which promises same-day food delivery at set times, the people said. Last week, Amazon dropped its $299 annual price for Fresh and instituted a $15 monthly fee, available to members of its $99 Prime delivery service.

For now, Amazon isn’t commenting on the report, but we’ll be sure to follow up on this developing story as the new service gets closer to launch.

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Amazon shares fell $7.14 (-0.85%) to $834.57 in Tuesday morning trading. Year-to-date, AMZN has gained 23.49%, versus a 5.24% rise in the benchmark S&P 500 during the same period.