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March 3, 2019 | Amazon to Launch New Physical Grocery Store Chain Business

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Apart from Whole Foods, which Amazon purchased, it will launch its own grocery store chain.

The Wall Street Journal reports Amazon to Launch New Grocery-Store Business.

Amazon.com Inc. is planning to open dozens of grocery stores in several major U.S. cities, according to people familiar with the matter, as the retail giant looks to broaden its reach in the food business and touch more aspects of consumers’ lives.

The company plans to open its first outlet, in Los Angeles, as early as the end of the year, one person said. Amazon has already signed leases for at least two other grocery locations with openings planned for early next year, this person said, without saying where those stores would be.

Additional talks are under way for Amazon grocery stores in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, the people familiar with the matter said.

After two decades of upending the retail industry by shifting shoppers to the internet, Amazon in recent years has become increasingly focused on physical retail, posing a threat to traditional grocers. The new chain would help Amazon in fulfilling a yearslong initiative to build out a physical grocery presence, which was at one point potentially envisioned to reach more than 2,000 brick-and mortar stores in a variety of sizes and formats.

Amazon is also exploring purchasing regional grocery chains with about a dozen stores under operation, one person said, that could bolster the new chain.

Good Thing?

Is this a good thing? Of course it is.

Any action that provides lower costs and more choices for consumers is a good thing by definition. Lower costs improve standards of living.

“Customers want to be able to shop when it is most convenient for them, which could be in-store, online or a combination of the two,” said a spokeswoman from the International Council of Shopping Centers.

In the absence of distorted Fed and Congressional policy, free market capitalism delivers what consumers want. And if businesses fail at their mission, they go bankrupt.

If is only when governments and the Fed interfere with capitalism does capitalism seem to fail. The answer isn’t more socialism or more government, it’s more capitalism.

Mike “Mish” Shedlock

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March 3rd, 2019

Posted In: Mish Talk

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