Amazon Tests ‘New Concept’ Satellite Grocery Store Next to Whole Foods

Amazon is expanding its grocery reach with a new type of store.

The company opened a store called “Amazon Grocery” within the same Chicago building that houses a Whole Foods Market, another Amazon-owned company.

“With this new concept, customers can shop their favorite natural and organic products at Whole Foods Market and get a broader product assortment from Amazon all in one trip, saving them time and mone,” Jessica Martin, a spokesperson for Amazon, told PYMNTS Friday (Oct. 18).

Amazon says the 3,800-square-foot small-format store is designed to offer customers a simpler way to grab “grocery top-ups” coffee and grab-and-go meals during their regular Whole Foods visit.

While these customers are seeking natural and organic products, many often patronize other stores to find national grocery brands or household essentials, the company said.

News about the store was reported by The Informaiton Thursday (Oct. 17) evening. That report noted that Amazon Grocery offers some grocery and household brands that aren’t sold at Whole Foods — due to that company’s restrictions on things like food additives and artificial sweeteners.

The new store is the latest effort on the part of Amazon to push further into the grocery space. Earlier this month, the company announced it was developing Amazon’s first automated micro fulfillment center at its Whole Foods store outside Philadelphia.

“Let’s imagine a customer is shopping in-store,” Tony Hoggett, senior vice president of Worldwide Grocery Stores at Amazon, wrote in a company blog post this month. “As they browse the aisles for their favorite Whole Foods Market products, they can also easily place an order for Tide Pods and Pepsi from the Amazon app on their phone. These additional items will be prepared in the back-of-house while the customer finishes up shopping and will be ready to go when they check out — all within minutes after placing the order.”

The company is also expanding its third-party grocery delivery offerings and debuted a new private-label brand called Amazon Saver in September.

Meanwhile, PYMNTS wrote earlier this week about efforts by Amazon and rival Walmart to court budget-conscious shoppers ahead of the holidays.

For Walmart, that means the launch of its Thanksgiving meal deal. For Amazon, it means the return of its early holiday beauty deals event, the Amazon Holiday Beauty Haul.

“In the face of financial challenges, consumers like to get ahead of their holiday spending,” PYMNTS wrote.

The PYMNTS Intelligence report “Consumers Cautiously Spend More Amid Lower Inflation” found that of the 77% of consumers who bought gifts during the 2023 holidays, 56% had already planned most or all of their purchases before shopping.

Walmart and Amazon’s announcements mark the latest moves in their ongoing push to position themselves as the solution to early planners’ holiday spending anxieties.