Amazon confirms plans to open a new grocery brand

Amazon said it plans to open its first new brand of grocery store in California next year, as it amps up its ambitious push to become a bigger name in food.

“Amazon is opening a grocery store in Woodland Hills in 2020,” an Amazon spokesperson confirmed to CNET, soon after the company published four new jobs postings for the location. Woodland Hills is a neighborhood in Los Angeles.

The store will be different from Amazon-owned Whole Foods, the company said. It didn’t say whether it will open more of these locations, what its selection or pricing will be, or what the brand name is. But in the jobs postings, the company described the Woodland Hills location as “Amazon’s first grocery store,” suggesting that it will have the Amazon brand name and that the company could expand to multiple sites.

The store won’t use the company’s Amazon Go technology, which allows customers to check out without waiting in line. Instead, checkout will be conventional as at other grocery stores, the company said.

In addition to Whole Foods, which Amazon bought for $13.2 billion in 2017 and has over 500 stores, the company offers grocery delivery through Amazon Fresh, the main Amazon website and Prime Now, as well as food at Amazon Go.

The Wall Street Journal in March wrote about the existence of Amazon’s new grocery store format, which the company hadn’t confirmed until this week. Last month, the publication said Amazon was already working on additional stores in Los Angeles, Chicago and Philadelphia.

The new store, though with only one confirmed location so far, points to Amazon’s growing ambition in the roughly $800 billion US grocery market, where rival Walmart is the leader and Amazon, even after its Whole Foods deal, remains a small player. Expanding in the grocery sector helps Amazon, the world’s largest online retailer, in a number of ways: It reinforces customer loyalty because people tend to shop at a local store every week and it could allow the company to continue its fast revenue growth, which typically hovers around 20% every quarter despite its massive size.

Additionally, the new line could let Amazon move into the more mainstream grocery store business, while maintaining Whole Foods as a higher-end store for organic and specialty foods. This work could offer new competition to KrogerSuperValu and many other supermarket chains.

While Amazon is known for skillfully pushing into new markets, the new store comes with lots of risk. Several of Amazon’s other physical store lines, including Amazon Go and Amazon Books, aren’t yet huge moneymakers. It’s also shuttered its line of mall kiosks, which sold Amazon devices and smart-home gear. Plus, the company would have to spend years building out a new chain of stores then bank on people switching their weekly habits to go to them. Added to that, the grocery business offers razor-thin margins, so there’s little wiggle room for Amazon to lower prices while still trying to bring in a profit.

Amazon posted job openings for a store lead, grocery associates and food service associates at the Woodland Hills store. The store has been reported to be a former Toys R Us that’s about 35,000 square feet in size.

When asked if the new stores will compete against Whole Foods or signal a move away from investing in that brand, Amazon said no, offering strong support for continuing to grow that business.

“When it comes to grocery shopping, we know customers love choice, and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” the Amazon spokesperson said, noting that Whole Foods opened 17 locations this year and that more are planned. The spokesperson said Amazon will continue to invest in grocery delivery with Whole Foods.

In another sign of Amazon’s growing interest in the grocery business, the company last month did away with its $14.99 monthly fee for Amazon Fresh grocery delivery. The change undercuts rival Walmart’s new Delivery Unlimited program, which costs $12.95 a month and was just introduced in September.

Source: cnet.com

Walmart selling ModCloth

Walmart is selling ModCloth to Go Global Retail. The terms of the deal, expected to close later this year, were not announced.

The discount giant acquired ModCloth in March 2017 as part of a move to increase its brand portfolio and target younger, higher-income shoppers with brands not available on Amazon. But ModCloth, along with several other of the acquired brands, including Bonobos, have yet to turn a profit, according to Recode.

Founded in 2002, ModCloth sells exclusive indie fashions and its own vintage-inspired line of apparel and accessories, with a target audience of women 18 to 35. In addition to its e-commerce capabilities, ModCloth has opened several showroom-styledstores. It also has a deal with Nordstrom.

Go Global Retail describes itself has a brand investment platform for strategic investors in the consumer sector. It has worked with other apparel companies including Guess and Billabong, according to its website.

“We believe that ModCloth’s strong brand equity positions it for growth in the future,” said Ashley Hubka, senior VP of corporate strategy, development and partnerships at Walmart. “We feel good about the progress at ModCloth and believe that Go Global’s team and scale out strategy presents an attractive opportunity for the employees and customers of this beloved brand.”

Go Global said that ModCloth will continue to operate as a freestanding, independent brand out of its current operational set up. Go Global Retail will invest in the fashion retailer’s digital capabilities, including artificial intelligence and predictive analytics.

“We believe that together with current management, ModCloth has the ability to become a stronger player in the premium fashion market, nationally as well as internationally,” stated Go Global’s Jeff Streader.

ModCloth will continue focusing on its core customers; championing values of female empowerment and inclusivity; and further serving their passionate buying community by celebrating their stories and offering a full range of sizes, the company stated.

Source: chainstoreage.com