Retailers

How Fast Will Amazon Grow?

Third Amazon Fresh store opens with scores of additional locations in the pipeline
Photograph: Shutterstock

If Amazon’s apparent plans for grocery domination are successful, millions of Americans will order their food from either Amazon Fresh or Whole Foods Market and have it delivered contact-free inside their garage doors.

Amazon recently opened the doors to its newest Amazon Fresh in Northridge, Calif., at 19340 Rinaldi St. While the store marks the banner’s third location in SoCal (joining Woodland Hills and Irvine), dozens of additional stores in various stages of development are also underway in the area, with a North Hollywood location likely to open next. According to Planned Grocery, additional SoCal stores are planned or under construction in Poway, Whittier, Fullerton, Long Beach, La Verne and Encino. Additionally, four locations in the Chicago area are slated to open soon.

“Amazon seems to be putting the pedal to the metal with its grocery expansion plans,” R-5 Capital Analyst Scott Mushkin wrote in a research report that explores the partnership between the e-tailer giant and SpartanNash, as one avenue of accelerated growth for Amazon’s grocery divisions. Last month, WGB reported the new agreement and its potential ties to the Seattle-based e-tailer’s expansion plans for Amazon Fresh.

“In our view, it is hard not to see the recent partnership between Amazon and Spartan as a sign that Amazon intends to grow its store fleet rapidly over the next few years,” Mushkin said. “Our channel research continues to indicate that Amazon’s current goal is 2,000 consumable-focused retail stores in the U.S. blended between Whole Foods and Amazon Fresh (probably 750 Whole Foods with the balance being Amazon Fresh). Speed being a hallmark of Amazon, we are tracking over 30 Whole Foods and 27 Amazon Fresh stores in some sort of development currently.” At present, Whole Foods operates about 500 stores in the U.S.

Austin, Texas-based Whole Foods, which has opened a slew of new stores in recent weeks, including multiple stores in Florida, stores in both northern and southern California, an Ideal Market in Denver and a new store in Westbury, N.Y., is also poised to enter a new market. The grocer plans to open its first store in Montana in the city of Bozeman, a Whole Foods Market spokesperson confirmed to WGB. The spokesperson could not offer additional details nor a projected opening date for the store.

But according to R-5 Capital’s analysis, the rumored and known plans for expansion may be just the tip of the iceberg. “What is intriguing, is that our data continues to show an increase in the number of undesignated stores that are either planned or being proposed, now totaling more than 150,” writes Mushkin, adding that if many of these turn out to be Amazon locations, the company’s growth will be even more impressive.

Amazon is also expanding its contact-free delivery services. On Nov. 12, the company extended its in-garage delivery service—Key by Amazon—to tens of millions of additional Prime members in more than 4,000 cities, including Los Angeles, Chicago, New York and Boston. Key by Amazon, whichoriginally launched in 50 cities, is also launching Key In-Garage Grocery Delivery, allowing eligible Prime members with a myQ smart garage door opener to have grocery orders from Whole Foods Market or Amazon Fresh delivered inside their garage.

Once shoppers link their myQ app with Key, they select “Free In-Garage Delivery” at checkout on Amazon.com. To view videos of their delivery, customers can also use a compatible Ring smart home camera with their Ring protect plan, or LiftMaster Smart Garage Camera powered by myQ with a myQ video storage subscription.

“Customers tell us they appreciate the convenience and peace of mind that in-garage delivery offers, and we’re happy to expand the service to thousands of additional cities,” said Pete Gerstberger, head of Key by Amazon, in a statement. “With this latest expansion, Amazon customers in thousands of big cities and small towns across the U.S. can now enjoy another Prime benefit with convenient, contactless deliveries right in their garage, all backed by the Key by Amazon Happiness Guarantee.”

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