Amazon Opens Whole Foods 'Store Within a Store'

At a Whole Foods market near Philadelphia, Amazon is catering to customers who want some Doritos or Kraft Mac & Cheese as well as their usual organic kale and quinoa.The experiment involves a robot-powered "store within a store" at the Plymouth Meeting location, Axios reports. Shoppers can pick up Whole Foods items in the store and use a QR code on the Amazon app to order mainstream brands for pickup within the store. The 10,000-square-foot "micro-fulfillment center," which uses "ShopBot" technology from Silicon Valley startup Fulfil, is operated by robots and Amazon staffers, reports Bloomberg. The system offers more than 12,000 products.

For online shoppers, who will see one combined cart, curbside pickup is free, while delivery runs $9.95 unless you're a Prime member with Amazon's grocery delivery add-on. This latest move is part of Amazon's ongoing attempt to tweak its grocery strategy. The company racks up more than $100 billion a year in grocery sales, though its market share has been static at around 4% for years. The retail giant has spent years tinkering with formats, from cashierless Amazon Go stores to its 2017 acquisition of Whole Foods. Recently, Amazon has closed some underperforming Fresh stores and taken out its Just Walk Out cashierless technology from some outlets, though it still licenses the tech to other retailers.

Industry analysts see the Whole Foods mashup as Amazon's way to boost grocery sales without watering down the Whole Foods brand. "It's an appropriate response to customer demand," says Neil Saunders of GlobalData, adding that the hope is to "capture more spending without diluting the Whole Foods brand," per Axios. Amazon says it plans to "refine and expand this offering to additional stores over time," the Verge reports.

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In a separate experiment in Chicago, the seating area and coffee shop of a Whole Foods store has been replaced with an Amazon Grocery kiosk offering mainstream brands. The goal is for "shoppers to buy their cabbage at the Whole Foods upstairs before basking in the purple glow of Spicy Sweet Chili Doritos by the lobby," per the Wall Street Journal.