Amazon Reportedly Planning on Opening Up to 3,000 Amazon Go Stores in 3 Years

Amazon is reportedly considering rapidly increasing its pace of investment in Amazon Go stores by opening up to 3,000 of them over the next 3 years. Per Bloomberg:

Amazon.com Inc. is considering a plan to open as many as 3,000 new AmazonGo cashierless stores in the next few years, according to people familiar with matter, an aggressive and costly expansion that would threaten convenience chains like 7-Eleven Inc., quick-service sandwich shops like Subway and Panera Bread, and mom-and-pop pizzerias and taco trucks. Chief Executive Officer Jeff Bezos sees eliminating meal-time logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs…

Amazon is targeting dense urban areas with lots of young, busy, affluent residents willing to spend a little more than a typical fast-food experience for better quality food, the people said. The target locations make it less of a threat to suburban gas station-convenience store combinations and more of a threat to big cities’ quick-service eateries, such as Subway Restaurants, Panera Bread Co. and Pret a Manger.

Our take:

  • Convenience stores have existed for a long time, but Amazon has unique data on consumer behavior and shopping patterns, and could positions its Go stores in locations it believes will be most likely to change behavior.
  • Most convenience stores are currently located at or near gas stations, and typically primarily stock candy, soft drinks, snacks, beer, and tobacco products.
  • We would view this as more of a threat to quick-serve restaurants, grocery stores, and (potentially) pharmacies.

For context, Amazon just opened its fourth Go store yesterday.

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