Amazon is launching a new supermarket brand, starting in LA

The company growing its footprint in the food business; in talks in San Francisco, Chicago and others

Jeff Bezos (Credit: Getty Images and iStock)
Jeff Bezos (Credit: Getty Images and iStock)

Amazon is planning to launch a new line of grocery stores in several major U.S. cities.

The first store is set to open in Los Angeles as early as the end of the year, as the e-commerce giant grows its footprint in the food business, the Wall Street Journal reported, citing people familiar with the matter. The company has reportedly already signed leases for at least two other locations slated to open early next year.

Amazon is in talks for stores in San Francisco, Seattle, Chicago, Washington D.C. and Philadelphia. The new chain will be separate from the Whole Foods Market brand, which Amazon owns. The stores are intended to provide a wider variety of products than the upscale Whole Foods chain rather than directly competing with it.

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Despite signed leases, there’s no guarantee Amazon will open stores in those locations, the report said. Retailers can back out of contracts or delay openings if certain conditions aren’t met. Amazon has sought flexibility in lease negotiations because it doesn’t want restrictions on the types of goods it can sell. The company has been targeting new developments and occupied stores with leases ending soon. Locations will reportedly be about 35,000 square feet, smaller than the typical 60,000-square-foot supermarket.

The company is also weighing acquisitions to grow the new grocery store brand — a strategy that would entail purchasing regional chains operating about a dozen stores.

The news is the latest move in Amazon’s foray into brick-and-mortar locations. The company is rolling out cashierless Amazon Go locations in urban areas nationwide — including in New York, Seattle, San Francisco and Chicago.

It’s unclear whether the supermarket brand will also be cashierless, the report said. [WSJ] — Meenal Vamburkar