Amazon plans to open convenience stores and curbside pickup for groceries, according to report

For years now, Amazon has been expanding its services, introducing e-book readers, tablets, same-day delivery and smart speakers. But according to a report from the Wall Street Journal, the commerce giant is about to take another huge step into unfamiliar territory: groceries.

Amazon was an online-only marketplace before opening its first physical location, a bookstore, in November 2015. But the Journal, citing anonymous sources familiar with the project, says the company is planning to open a series of convenience stores as a complement to its new grocery delivery service, Amazon Fresh.

The stores, which will be patterned off chains such as Aldi and Lidl, per the Journal, will not open for at least another year, the sources said, and will likely have few employees and a bare-bones layout devoted to perishable items customers cannot order for delivery. Foods with longer shelf-lives, however, might be available for order within the store, to be delivered to customers’ houses as part of Amazon Fresh.

Fresh, which is available only in 10 cities worldwide, delivers groceries direct to customers, similar to services such as Peapod and Instacart. While it originally cost $299 annually, Amazon recently reformatted the program so that it only costs $15 per month for Amazon Prime members.

At the moment, Amazon accounts for 1.1 percent of the U.S. food and beverage market and believes it can expand that share greatly. According to Geek Wire, the company has already begun work on its first drive-up grocery store in its hometown of Seattle, where it initially tested its first bookstore and Fresh as well.

Another development Amazon is working towards in its grocery plan is curbside pickup, which would have to compete with Walmart’s successful similar program that is expanding aggressively. According to the Journal, the company is developing license-plate reading technology in order to speed up wait times.

Just two percent of all grocery sales are online, per the Journal, and making food delivery profitable is significantly harder than typical package delivery. Still, on social media, some commentators wondered whether Amazon would surrender its prime advantage of convenience with physical stores.

This story was originally published October 11, 2016 at 2:54 PM with the headline "Amazon plans to open convenience stores and curbside pickup for groceries, according to report."