Amazon launches Amazon Grocery, its newest grocery concept

A 3,800-square-foot ground retail space in a high-rise building in Chicago’s upscale Near North Side neighborhood is the site of Amazon’s next experiment in the supermarket business.  

The online retail giant launched its first “Amazon Grocery” location in a space that most recently served as a coffee shop for the Amazon-owned Whole Foods Market on the second floor of the One Chicago Building. 

Amazon said in an email to Supermarket News that the new store carries 3,500 products and aims to capture Whole Foods shoppers looking to make quick trips for things like grocery top ups, coffee, and grab-and-go meals.

A visit to the store on Friday morning revealed that Amazon Grocery carries name-brand products shoppers would find at a typical grocery store, such as Coca-Cola, Fritos, and Folgers coffee. 

The store, located at 3 W. Chicago, also features six regular aisles of packaged goods items, a coffee bar, a cold drinks section, ready-made sandwiches, sushi, and a baked goods case with donuts, muffins, and cookies. 

Signage outside the store offers buy-one-get-one free deals on Red Baron pizza and Lay’s potato chips, and more. Inside the store are six aisles of groceries. 

“Customers shopping at Whole Foods Market today are looking for natural and organic products. However, we know that many of them also visit additional stores to grab their favorite national grocery brands or household essentials to complete their weekly shop,” Amazon said in a prepared statement. “Through Amazon.com, Amazon Fresh, Amazon Go, Whole Foods Market, third-party grocery partners, and this new shopping experience, we offer a wide selection of national and local brands plus fresh, high-quality produce, meat, and seafood.”

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The new concept comes at a time when Amazon has hit the reset button on its grocery strategy. This year, the company began opening Amazon Fresh stores over the Summer — in Bensalem, Penn.; Eatontown, N.J.; and in the Chicago suburb of Arlington Heights — after putting the expansion plan on hold in 2023. 

Meanwhile, Whole Foods launched its own experiment in September, opening its first small-format store, Whole Foods Market Daily Shop, in New York City’s Lenox Hill neighborhood. While smaller than their typical store — the Lenox Hill store is 9,101 square feet — the Daily Shop format is substantially larger than the Amazon Grocery concept.

Whole Foods has plans for Daily Shop locations in New York’s East Village and Hell’s Kitchen neighborhoods. 

“We’re always looking for ways to make it easier for customers to shop for groceries, whether online or in store,” said Amazon spokesperson Jessica Martin in an email to Supermarket News. “We’re testing and learning with a new grocery shopping experience with a small-format store from Amazon under the same roof as Whole Foods Market in the One Chicago building. With this new concept, customers can shop their favorite natural and organic products at Whole Foods Market and get a broader product assortment from Amazon all in one trip, saving them time and money.”

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While the Amazon Grocery location sells a wide variety of household goods and groceries, the store did not feature any of Amazon’s private-label products. In early September, Amazon released a discount private-label line of grocery products, Amazon Saver, which features roughly 100 products, most of which cost $5 or less.

Amazon Grocery features four self-checkout lanes and an area where shoppers can make returns on items purchased on Amazon.com. The store also features electronic shelf labels throughout the store.

Also, the store includes a kiosk that enables Amazon Prime loyalty members to scan a QR code through the Amazon app and have the total charged to their Amazon account. Amazon Grocery also features an Amazon One kiosk where Amazon Prime members can scan their palm to pay through their Amazon Prime account.

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While the Amazon Grocery and Whole Foods stores are not connected, shoppers can easily make purchases at the new store and then take a quick escalator ride up to the Whole Foods upstairs.

The vast supermarket upstairs carries few of the items you will find at Amazon Grocery. But one item you can get at both is a 45 fl. Oz. bottle of Tropicana orange juice, but your shopping receipts will be different from the two locations. 

That’s because the Whole Foods upstairs charges $4.49 for the bottle of orange juice, while making the purchase at Amazon Grocery will only set you back $3.99.

The opening of the new store comes almost at the same time as Amazon’s other plan to try to bring the two grocery entities together. On Oct. 9, Amazon announced that it has modified Amazon Fresh fulfillment centers at 26 stores to feature some products from Whole Foods, allowing shoppers to place online orders including products from both grocers.

Amazon also announced that it is building its first-ever automated micro fulfillment center at a Whole Foods in Plymouth Meeting, Pa., which will allow customers to place online orders with products from Amazon Fresh and Amazon.com.

Similarly, the grocer is combining all three areas of its business — Amazon.com, Amazon Fresh, and Whole Foods — through a program that allows shoppers to make purchases from all three entities in a single order.