Amazon might be looking at taking over as many as 110 old Sears and Kmart stores in order to launch new Whole Foods locations.
BMO Capital Markets revealed the prediction in a note to clients on Wednesday (April 10), basing its findings on the demographics of those particular department stores, as well as the fact that there isn’t another Whole Foods store within a three-mile radius.
Sears — which hasn’t turned a profit since 2010 — was once the biggest department store chain in the country. Yet, it has failed to keep pace with competitors in recent years. Sears had 68,000 workers and 687 locations at the time of its Chapter 11 bankruptcy filing in October 2018.
After analyzing all of Sears’ remaining real estate, BMO has estimated that the retailer has about 480 locations open, with 80 expected to close. Sears also has about 430 locations available for other uses — 260 in the process of closing, and 170 still vacant.
“There are plenty of Sears/Kmart boxes surrounded by high quality demographics which would be appealing to a variety of retailers and other non-retail uses (i.e. hotels, residential, creative office, etc),” BMO analyst Brandon Cheatham said, according to CNBC. “Further, there aren’t many developers that are building additional, ground up, retail space, so if Amazon, or others, is looking to grow somewhat rapidly, this would be a quick and likely cheap(er) way to expand.”
Late last year it was reported that Amazon wants to expand the number of Whole Foods stores around the country to enable more customers to use its delivery service.
The move will increase competition in the supermarket industry, where grocers have already taken steps to counter Whole Foods under Amazon’s management. “Strategic investments to improve Whole Foods will only increase the already intense competitiveness in the grocery space,” Bob Goldin, co-founder of consulting group Pentallect, said at the time.
In addition to opening new Whole Foods locations, Amazon is also reportedly planning to open its own chain of “value” grocery stores, and could possibly use some of the Sears locations for that endeavor.