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US: Amazon considers Sears Stores for Whole Foods expansion

 |  January 13, 2019

Amazon has its eyes on expansion for its Whole Foods brand in closed Sears and Kmart stores, according to a report by Yahoo! Finance.

The recent woes of Sears and other struggling retailers are seen as an opportunity for the online retail giant. Sources told Yahoo! that the company is visiting sites of now defunct retail spaces.

For example, Whole Foods managers went to a site in Utah that used to be a Kmart. The store shut down in the middle of last year, and there haven’t been any new tenants since.

Right now, Whole Foods has about 470 stores around the nation – which isn’t much considering the proliferation of Walmart and Kroger stores, but it now has the capital to expand into previously unreachable areas, like Montana.

Sears has closed 123 stores in the last three years, and 205 Kmart locations have shuttered. The closed stores cover a wide swath of area around the country, and that can help Whole Foods expand quickly without building new facilities.

Neil Saunders, managing director of retail at GlobalData, said Amazon is smart to secure former retail spaces, and that landlords are open to grocery stores because they help drive foot traffic.

“There is lots of vacant retail space that they can take advantage of, and that gives them access to reasonable retail locations,” he said, “but I also think they want to secure good real estate deals by filling voids, and getting good rental levels from landlords.”

In November, Amazon announced the expansion of grocery pickup from Whole Foods Markets through Prime Now in eight more cities. Those cities include Birmingham, Colorado Springs, Long Island, Milwaukee, Salt Lake City, San Antonio, Tacoma, and Tulsa. Prime customers in those cities can shop at Whole Foods Market and pick up their orders in as little as 30 minutes without leaving their cars. Grocery pickup from Whole Foods Market is now available in 22 cities.

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