What to know:

  • Amazon launches a small-format “Amazon Grocery” store in Chicago, sharing space with Whole Foods Market.
  • The 3,800-square-foot store offers 3,500 products, including items not available at Whole Foods.
  • The company is integrating its various grocery operations to create a unified shopping experience.

Amazon is taking bold steps to revolutionize its grocery business by testing innovative store formats that blend its various retail operations. The e-commerce giant has launched a new small-format store called “Amazon Grocery” in downtown Chicago, strategically located in the same building as one of its Whole Foods Market locations.

According to The Wall Street Journal, this new concept aims to provide customers with a complementary shopping experience. The store carries national brands and household essentials that aren’t typically found in Whole Foods, including products containing artificial sweeteners and color additives.

The retail giant is also experimenting with automated solutions to enhance its grocery operations. In Plymouth Meeting, Pennsylvania, Amazon is constructing its first-ever automated micro-fulfillment center attached to a Whole Foods location. This initiative is part of a broader strategy to integrate the fulfillment networks of Whole Foods Market and Amazon Fresh, creating a more seamless shopping experience.

The company’s efforts appear to be paying off, with Whole Foods experiencing over 40% sales growth since Amazon’s acquisition in 2017. This new format represents Amazon’s latest attempt to strengthen its position in the highly competitive grocery sector, where it faces strong competition from established chains with extensive retail networks.

A fresh take on grocery shopping that brings together the best of both worlds under one roof.