Amazon considering opening up to 3000 cashierless stores by 2021

Marco Green
September 20, 2018

The fourth Amazon Go store just opened, but a new report claims a lot more could be on the horizon.

Having almost 3,000 locations would make Amazon Go the third-largest convenience store chain in the U.S., just under 7-Eleven and the parent company of Circle K, according to CSP, an industry publication.

So far, Amazon has declined to comment on reports of it opening additional Go Stores.

Correction: Sept. 19, 4:32 p.m. PT: Fixes the number of Amazon Go stores in operation and when they first opened. At present, the two older locations have salads, sandwiches, snacks, and a small range of groceries; the newer ones don't offer groceries at present.

AmazonGo stores do not have cashiers.

The first Amazon Go store in Seattle.

The challenge to Amazon's plan is the high cost of opening each location.

News of the company's potential ambitions for AmazonGo sent shares of grocery and retail rivals lower.

Shares of USA supermarket chains Kroger Co (KR.N) and Target Corp (TGT.N) fell between 1 and 2 percent following the news. Amazon rival Walmart operates 5,300 locations, and Kroger, the largest US grocer by sales, runs 3,900 stores.

A 3,000-store footprint would catapult Amazon into the ranks of America's major physical retail chains. Amazon's other brick-and-mortar initiatives include about 20 bookstores around the US and the natural grocery chain Whole Foods Market, acquired a year ago. AmazonGo is the most distinctive of all of its physical stores.

"We have no plans to open 2,000 of anything", a spokesperson said a few days after the newspaper's story published.

If a shopper puts an item back on the shelf, Amazon removes it from his or her virtual cart. Bezos is willing to lose money on long-term initiatives when he smells opportunity.

Bloomberg reported Wednesday that Amazon is considering different models as it looks to expand Go, including weighing whether to include a limited selection of groceries, or simply focus on prepared food pickup.

According to people familiar with the matter, the company could have 10 locations running by the end of the year and as many as 50 in 2019.

Opening multiple locations in proximity, like it's doing in Seattle, could also help Amazon reduce costs by centralizing food production in one kitchen serving many stores. For reference, there are about 155,000 convenience stores across the country, and about 80 percent of those are combined with gas stations.

If someone passes back through the gates with an item, his or her associated account is charged.

AmazonGo will be more of a threat to fast-casual restaurants if it is targeting cities, said Jeff Lenard, vice president of NACS. The convenience store concept, which works with its own app, allows customers to shop without having to wait in checkout lines.

"AmazonGo already has no lines", Lenard said. "The key to success will be convenient locations".

Other reports by Click Lancashire

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