[caption id="attachment_104179" align="aligncenter" width="700"] Product assortment at the new Amazon Go Grocery store
Source: Archpaper/Amazon [/caption]   Amazon Go Grocery Will Not Replace Whole Foods Although the Amazon Go Grocery sources some items, mainly produce, from Whole Foods suppliers, most Amazon Go Grocery products are national brands, as well as a variety of Amazon private labels such as Happy Belly. The company said Amazon Go Grocery will not replace Whole Foods, and that Amazon will differentiate its own grocery chain from Whole Foods by offering a different selection of products at lower price points. Amazon Aims To Increase Its Physical Footprint, Especially in Grocery This move is only the latest in what has been an ongoing (albeit measured) move into the physical world of retail for Amazon. Previous steps include:

• November 2015: Amazon opens Amazon Books in Seattle. As of February 2020, there are 21 Amazon Books in the US, with two more planned in 2020.
• August 2017: Amazon buys Whole Foods for $14.7 billion. The company now operates more than 500 Whole Foods stores across North America and the UK.
• January 2018: Amazon opens its first Amazon Go store to the public. As of February 2020, there are 25 Amazon Go stores in the US, with one more in Seattle coming soon.
• September 2018: Amazon debuts its first Amazon 4-star in New York. As of February 2020, there are 10 Amazon 4-star stores in the US with 11 more planned for 2020.
• As of February 2020: There are five Amazon pop-ups in the US, with one more coming in Washington.
• February 25, 2020: Amazon opens its first Amazon Go Grocery store.

Coresight Research View Amazon has recognized that it cannot win major share in grocery with a pure-play online model, and this is another major step in brick-and-mortar grocery that will alarm incumbent rivals. One inhibitor on the medium-term impact of Amazon Go Grocery is likely to be the cost of any rollout: The hardware for each small Amazon Go store costs a reported $1 million. While we do not know the hardware cost for this larger format, any substantial set-up costs would suggest opportunities for Amazon Go Grocery lie mostly in high-traffic areas that will generate high sales densities.