Amazon considering opening 3,000 cashierless Go stores, report says

Galtero Lara
Setiembre 20, 2018

Amazon Go threatens traditional convenience store companies like 7-Eleven, as well as chain fast food sandwich and lunch chains like Subway.

Shares of USA supermarket chains Kroger Co (KR.N) and Target Corp (TGT.N) fell between 1 and 2 percent following the news. There is no checkout and no printed receipt, but customers must have a smartphone app to shop in the stores.

Amazon opened its first Amazon Go store in its hometown of Seattle in 2016.

Why it matters: While Amazon has ruled the e-tailer business for the past few years, physical stores represent a considerable investment which Jeff Bezos is willing to undertake for longer-term profitability. It would also give Amazon a much expanded footprint of physical stores in the U.S., adding to its more than 350 Whole Foods stores.

The idea is to open up stores in dense urban areas with large populations of young, well-to-do folks who are happy to pay a premium for high-quality meals on the go.

Amazon, like many secretive technology companies, rarely telegraphs its growth plans.

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At a Washington DC event last week, Bezos said Amazon was "very interested" in physical stores, but only if it has something new to offer. But it has pushed back on past reports that executives had given the green light to a major expansion of Go.

"We have no plans to open 2,000 of anything", a spokesperson said a few days after the newspaper's story published. Once inside, an array of cameras and sensors track shoppers' progress through the store, charging a credit card on file for items the shoppers take off shelves.

Its first location in downtown Seattle cost over $1 million in hardware, according to Bloomberg.

"It is still a very pricey technology to put in place, compared to a 7-Eleven", the source said. Focusing on prepared foods rather than groceries could help boost profit margins, and some of the existing stores are already doing that.

Amazon's ramp up could accelerate quickly.

Amazon wants to have at least 10 stores open by the end of this year, then 50 in 2019, then possibly a rapid expansion to about 3,000 by 2021, Bloomberg reported, citing people with knowledge of the matter.

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