Amazon plans new chain of grocery stores

Amazon plans new chain of grocery stores
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Amazon Inc. is planning to launch a chain of grocery stores in the U.S., with the first location set to open before the end of 2019.

The Wall Street Journal reports that the online retailer plans to move full-scale into the grocery store business with an inaugural location in Los Angeles by the end of the year and then plans for dozens more across the country.

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The company is also making plans to open stores in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, according to the Journal.

Reuters reported that shares of other grocery store chains including Kroger, Costco and Walmart all dipped upon the news. Amazon's stocks surged 1.4 percent, according to the news service, while its competitors dropped between 1 and 4 percent.

Amazon's new stores will not compete directly with Whole Foods, the Journal reports, which the company bought for $13.7 billion in 2017. The upscale grocery chain is not expected to be affected by Amazon's new venture.

The Journal reports that Amazon is also looking to redesign the traditional grocery store layout with its new stores, noting that Amazon plans to seek about 35,000 square feet per location, just more than half the amount of a traditional grocery store.

Amazon's moves could also involve the acquisition of local or regional chains, sources to the Journal, as the chain hopes to brand the new venture apart from its Whole Foods stores.

Amazon representatives declined to comment to the Journal for their story.

The company has reportedly signed two leases to open two more stores in early 2020, though the locations for those stores are unknown.