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Amazon plans to add Whole Foods stores

Amazon.com is planning to build and expand Whole Foods stores across the U.S., people familiar with the plans said, to put more customers within range of the e-commerce giant’s two-hour delivery service.

The push would bring Whole Foods to more suburbs and other areas where the natural grocer is quickly adding customers since the merger. That is a shift from the layoffs and slowing store growth Whole Foods experienced for several years before Amazon bought it in 2017 for roughly $13.5 billion.

Amazon and Whole Foods declined to comment on store construction or spending. In the Rocky Mountain region, one person familiar with the plans said, Whole Foods employees have visited potential retail spaces in parts of Idaho, southern Utah and Wyoming, where the grocer doesn’t have stores now.

Some of those spaces were about 45,000 square feet, slightly larger than the average Whole Foods store. The supermarket chain is using extra space in its stores to accommodate Amazon delivery and pickup from online orders.

The build-out would also intensify competition among grocers that are already fighting to retain customers. Supermarkets have been holding down prices and adding new services as consumers shift more of their shopping online. Other retailers are also widening the range of goods they sell, from discount grocers like Aldi and Lidl to pharmacy chains and convenience stores.

“Strategic investments to improve Whole Foods will only increase the already intense competitiveness in the grocery space,” said Bob Goldin, co-founder of consulting group Pentallect Inc.

Amazon offers Prime Now, a two-hour delivery option to members of its Prime subscription service in more than 60 cities, and online grocery pickup from Whole Foods stores in as little as 30 minutes from nearly 30 cities.

Amazon plans to expand those services to nearly all of its roughly 475 Whole Foods stores in the U.S., according to another person familiar with the plans. Amazon also wants to use benefits for Prime members to attract new customers to Whole Foods and draw them back more often.

The Prime Now service is becoming more popular. Amazon said it delivered more turkeys than ever through Prime Now and the company’s AmazonFresh service this past Thanksgiving, while Whole Foods broke a record for Thanksgiving bird sales.

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Dow Jones

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