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Amazon Plans To Expand Whole Foods, Ramping Up Competition With Major Grocers

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Amazon is planning to expand the national footprint of its Whole Foods chain with new stores and by making existing locations larger.

Amazon Plans To Expand Whole Foods, Ramping Up Competition With Major Grocers
Whole Foods produce

The expansion of the brand, which the e-commerce giant bought in 2017 for more than $13B, would add suburban locations and locations in new markets in the United States and possibly elsewhere.

The expansion would also ramp up Amazon's ambition to compete with Walmart and Kroger, which hold the largest shares of the nation's grocery market. That is because more Whole Foods stores would put more customers within range of Amazon's two-hour delivery service, Prime Now, the Wall Street Journal reports.

More Whole Foods locations offering Prime Now delivery would mean more direct competition for Walmart and Kroger, both of which offer pickup at a large number of locations. 

Amazon started offering two-hour grocery delivery services for Whole Foods customers through its Prime Now app last year and has been expanding the service ever since.

Most of the new Whole Foods stores would be, at 45K SF, a bit larger than standard ones, with the extra space to handle pickups of online orders, the WSJ reports. 

Simply offering more pickup locations would only be part of Amazon's strategy against the other major grocers. Since Amazon offers a range of goods that the other grocers do not, the company sees itself as positioned to disrupt the traditional grocery model, TechSpot reports

The grocery business would hardly be the only one subject to a dose of Amazon disruptiveness recently. Last summer, Amazon positioned itself to disrupt the consumer pharmaceutical industry with its acquisition of online pharmacy PillPack.

A Whole Foods expansion would also represent a change in strategy for Amazon since it bought the grocery chain. Whole Foods hasn't added many stores since the acquisition, though it has been adding customers at a healthy pace in its suburban U.S. locations.

Amazon might also expand the Whole Foods brand further outside the U.S., Grocery Dive reports. Currently Canada has 14 stores and Europe is wide open to expansion, since the only cross-Atlantic Whole Foods stores, seven in all, are in greater London.