Company News

Will Amazon’s C-Stores Be Category Killers?

E-commerce giant planning brick-and-mortar convenience stores, more

SEATTLE -- Inc. plans to introduce convenience stores as well as curbside pickup locations, according to a Wall Street Journal report citing people familiar with the matter.

As reported in a McLane/CSP Daily News Flash, the Seattle-based company aims to build small brick-and-mortar stores that would sell produce, milk, meats and other perishable items that customers can take home, said the report.

Using their mobile phones or touchscreens around the store, customers could also order peanut butter, cereal and other goods with longer shelf lives for same-day delivery.

For the convenience stores, Amazon is drawing influence from discounters such as Aldi and Lidl, as well as dollar stores, which are expanding in the United States with limited-assortment stores, private-label inventory and few employees, the report said.

The initiative threatens the c-store and drug-store channels as well as the grocery channel, said a SeekingAlpha report.

Amazon declined to comment on the c-store initiative for CSP Daily News.

Project Como

For customers seeking a quicker checkout, Amazon will soon begin rolling out designated drive-in grocery stores where employees will bring groceries ordered online to the car, the sources told the Journal. The company is developing license-plate reading technology to speed wait times.

The retailer intends the drive-in grocery concept, known internally as Project Como, exclusively for customers of its Fresh subscription service, which promises same-day food delivery at set times, the sources said. Last week, Amazon dropped its $299 annual price for Fresh and instituted a $15 monthly fee, available to members of its $99 Prime delivery service.

The company designed the new convenience stores and grocery stores to capture the share of people who prefer to pick out their produce or bring home their groceries on the way from work, the newspaper said. Amazon aims to compete more directly with grocery discounters, as well as Wal-Mart Stores Inc., which has recently been expanding its own pickup sites.

Amazon may be just weeks from opening its first drive-in grocery location in Seattle, one of the people said. GeekWire has reported that the company is behind a storefront being built there, which would allow customers to schedule 15-minute to two-hour windows to arrive for pickup.

Beyond Wal-Mart, Amazon faces a variety of competitors in grocery delivery, from national supermarket chain Safeway Inc. to regional companies such as FreshDirect LLC and startups such as Instacart Inc., the Journal said.

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