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The Wall Street Journal reports that Amazon continues to move forward with its plans to open a chain of grocery stores in the US that will not compete directly against its Whole Foods stores, but will add new bricks-and-mortar functionality to Amazon's broader value proposition.

The Journal says that the stores - specific details about which remain undisclosed - are likely to initially show up in Los Angeles, Chicago and Philadelphia, with the first stores likely to be in densely populated Southern California communities of Woodland Hills, Studio City and Irvine, possibly as soon as before the end of the year. The New York metropolitan area, New Jersey and Connecticut also are said to be in Amazon's early expansion plans.

The story says Amazon has signed leases for dozens of locations, generally between 20,000 and 40,000 square feet - with many of them "outside urban cores" and catering "to middle-income consumers. Apart from prepared foods, they will stock mainstream groceries such as soda and Oreos, people familiar with the matter said."

In Woodland Hills, California - about 22 miles north of Santa Monica - the Journal writes, "Local building and safety departments recently granted contractors hired by Amazon permits to change the facade, start electrical work on light fixtures and fire sprinklers, and to install an espresso machine and kitchen equipment at the property there. Filings show that there will be a substantial kitchen, indicating that the store will offer prepared foods.

"The roughly 35,000 square-foot store was previously occupied by Toys R Us, and its neighbors are Citibank, Office Depot and Sharky’s Woodfired Mexican Grill. There is a Costco wholesale market half a mile away."

The Journal notes that Amazon currently has 16 Amazon Go checkout-free stores, four Amazon 4-star stores, only carrying items ranked as having four stars or more on its website, and 18 Amazon Books stores. "Revenue from these bricks-and-mortar businesses is small but edging up," the Journal writes.
KC's View:
The "where" is important, but the "what" is far more so … and I continue to believe that if these are going to work, they are going to have to employ one or more of Amazon's various secret sauces … replenishment (via Subscribe & Save), loyalty (via Prime membership), or checkout-free technology (as in Amazon Go).

Now, Tom Furphy argues - and this is part of our innovation Conversation, which you can watch above - that Amazon's secret sauce is its relentless and obsessive customer focus.

It is going to be interesting. I think that then one thing we can count on is that Amazon will continue to push the ball forward.