Amazon on Monday said it plans to open its first new brand of grocery store in California next year, as it doubles down on its ambitious push to become a bigger name in food.
“Amazon is opening a grocery store in Woodland Hills in 2020,” an Amazon spokesperson confirmed to CNET on Monday morning, soon after the company published four new jobs postings for the location. Woodland Hills is a neighborhood in Los Angeles.
Amazon said the store will be different from Whole Foods, which the company bought for $13.2 billion in 2017. It didn’t say whether it will open more of these locations, what its selection or pricing will be, or what the brand name is. But, in the jobs postings, the company described the Woodland Hills location as “Amazon’s first grocery store,” suggesting it will have the Amazon brand name and that the company could expand to multiple sites.
The store won’t use the company’s Amazon Go technology, which allows customers to checkout without waiting in line. Instead, checkout will be conventional like at other grocery stores, the company said.
In addition to Whole Foods, Amazon offers grocery delivery through, the main Amazon website and Prime Now, as well as food at Amazon Go.
The Wall Street Journal in March wrote about the existence of Amazon’s new grocery store format, which the company hasn’t confirmed until Monday. Last month, the publication said Amazon was already working on additional stores in Los Angeles, Chicago and Philadelphia.
The new store, while only one confirmed location so far, points to Amazon’s growing ambition in the roughly $800 billion US grocery market, where rival Walmart is the current leader and Amazon, even after its Whole Foods deal, remains a small player. Expanding in grocery helps Amazon in a number of ways: it reinforces customer loyalty because people tend to shop at a local store every week and it could allow the company continue its fast revenue growth, which typically hovers around 20% every quarter despite its massive size.
Additionally, the new line could let Amazon move into the more mainstream grocery store business, while maintaining Whole Foods as a higher-end store for organic and specialty foods. This work could offer new competition to Kroger, SuperValu and many other supermarket chains.
While Amazon is known for skillfully pushing into new markets, the new store comes with lots of risk. Several of Amazon’s other physical store lines, including Amazon Go and Amazon Books, aren’t yet huge moneymakers. It’s since shuttered its line of mall kiosks, which sold Amazon devices and smart-home gear. Plus, the company would have to bank on people switching their weekly habits to go to a new store. Added to that, the grocery business already offers razor-thin margins, so there is little wiggle room for Amazon to lower prices while still trying to bring in a profit.
Amazon on Monday posted job openings for a store lead, grocery associates and food service associates at the Woodland Hills store.
When asked if the new stores will compete against Whole Foods or signal a move away from investing in that brand, Amazon said no, offering strong support for continuing to grow that business.
“When it comes to grocery shopping, we know customers love choice and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” the Amazon spokesperson said, noting that Whole Foods opened 17 locations this year.
In another sign of Amazon’s growing interest in grocery, the company last month did away with its monthly fee for Amazon Fresh grocery delivery, which was previously $14.99. The change undercuts rival Walmart’s new Delivery Unlimited program, which costs $12.95 a month and was just introduced in September.