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Amazon to Launch Whole Foods Online-Only Store

By Jennifer Saibil – Sep 1, 2020 at 1:48PM

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The online retail giant continues to ramp up its in-store and omnichannel grocery presence.

Amazon.com (AMZN 5.70%) is increasingly focused on the high-volume grocery category, and it's launching its first online-only fulfillment center for its Whole Foods subsidiary. The store will be located in the Sunset Park section of Brooklyn, New York.

Amazon's grocery sales tripled year over year in the second quarter ended July 31. While Amazon is working hard on fulfilling grocery orders for lots of new customers who came on board during the pandemic, this new Whole Foods store has been in the works for over a year. The retail king has already hired hundreds of workers to staff the store, which will exclusively service customers in the Brooklyn area with grocery delivery.

Woman and child grocery shopping.

Image source: Getty Images.

The news comes on the same day that rival Walmart (WMT 1.33%) announced it will launch its Amazon Prime challenger, Walmart+, on September 15.

Amazon has 26 Amazon Go stores, where customers can pick up groceries and walk out without waiting to pay a cashier, and one Go Grocery, which is a larger version of the same format.The company announced last week that it's opening its first Amazon Fresh store in Woodland Hills, California, where customers can choose same-day delivery or curbside pickup, or they can choose to shop in-store and bring home their orders while skipping the checkout line. Amazon also owns Whole Foods supermarkets, which has more than 500 U.S. locations. 

As large as they were pre-pandemic, Amazon sales soared as customers turned to the online retailer to fulfill essential needs under lockdown. The share price has in turn shot up 87% year to date.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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