Amazon may be prepping more grocery stores: reports

Virtual retailer Amazon.com is making further progress toward brick-and-mortar stores that would augment its home delivery of food and grocery, including a convenience store and curbside grocery pickup sites, reports said this week.

The Wall Street Journal on Tuesday said the company was exploring building convenience stores that would allow shoppers to buy fresh items to take home while also providing a means to order nonperishable products for home delivery. These stores would be in addition to planned drive-in locations where online grocery orders will be brought to customers, according to the report, which was based on confidential sources.

The online site GeekWire this week provided an update on a planned drive-up grocery currently under construction near Amazon's headquarters in Seattle, which GeekWire said would be similar to planned stores in the San Francisco Bay area. The Journal said an opening of one of those stores could be "weeks away," while saying the convenience stores could be a year or more away.

An Amazon spokeswoman declined SN's request for comment Tuesday.

As described in the reports, Amazon's grocery stores would appear to address a rapid rollout of "click-and-collect" offerings from conventional retailers like Kroger and Wal-Mart Stores, in a low-labor environment similar to that of hard discounters like Aldi. Providing pick-up sites for online orders can address the high costs of providing "last mile" delivery, particularly for chilled and frozen and perishable items, sources said.

Amazon offers grocery delivery through AmazonFresh but is moving towards having brick-and-mortar locations. Photo: Kevork Djansezian/Getty Images News/Getty Images

Amazon currently offers home delivery of grocery products through its AmazonFresh offering in select markets, available only to its Amazon Prime members at an additional cost.

The stories come on the heels of further details emerging from Walmart's recent acquisition of Amazon rival Jet.com. In an investor conference last week, Doug McMillan, Walmart's CEO, lauded the technology behind Jet and its founder Marc Lore, now Walmart's e-commerce CEO, saying they provide a new blueprint for tackling "everyday low price" offerings in cyberspace.

"From an offensive perspective, Walmart’s ability to link the company’s existing global network of more than 11,500 physical ship-to/ship-from supply chain locations to its expanded e-commerce presence could make the difference in this battle of the retail titans," Jenn Markey, VP of the online pricing data from 360pi, Ottawa, Ont., said of Walmart this week. "From a defensive perspective, 50% of Walmart’s U.S. sales come from grocery and with this category poised to go online along with personal care, Walmart needs to up its e-commerce game to protect revenues and market share."