Amazon seeks retail space for online growth
Less than a year after closing its acquisition of Whole Foods, Amazon.com is looking for fresh ways to expand its bricks-and-mortar retail network while bolstering the online shopping business.
The world's largest online retailer is searching for bigger Whole Foods locations in cities that can serve as both grocery stores and urban distribution centres for delivering goods to online shoppers more quickly. Amazon is seeking more retail space to accommodate grocery aisles and storage for the most popular items purchased from Amazon's website.
Whole Foods is also working with Regency Centers Corp, one of its largest landlords, on a project to convert car parks at existing stores into stalls for Amazon delivery contractors to load up their orders. A spokeswoman for Whole Foods declined to comment, and Amazon didn't respond to requests for comment. John Nahas, vice president of investments for Regency Centers, confirmed that Whole Foods representatives have asked for larger retail spaces and parking stall installations in areas with high concentrations of Amazon Prime subscribers. Regency Centers owns and oversees 28 Whole Foods properties across the US.
Amazon's investment in physical retail is partly designed to lift the online shopping business. The company began rolling out two-hour delivery of groceries from Whole Foods stores in the US last month. It currently maintains warehouses for orders of non-grocery items. Combining them could help Amazon cut costs and deliver goods more quickly. The plan would more deeply integrate the business Amazon acquired last year for $13.7bn (€11bn).
Walmart has been experimenting with ways to use its store presence to give shoppers quick access to online orders. Amazon wants more spaces to store goods close to customers to complement its huge warehouses on the outskirts of big cities.
The urban spaces are needed to expand the selection offered through the two-hour Prime Now delivery service, which currently carries a limited inventory comparable with what's found in convenience stores.
Transitioning more orders to Prime Now would help Amazon reduce its reliance on United Parcel Service, DHL and other traditional package handlers. Amazon has contract workers shuttle local deliveries in their own cars, similar to the model used by Uber and Instacart. (Bloomberg)