(Reuters) - Amazon.com Inc is planning a major roll-out of an online grocery business.
One of the people familiar with AmazonFresh's expansion plans said new warehouses will have refrigerated areas for food, but also space nearby to store up to one million general merchandise products.
The company started testing AmazonFresh in its hometown of Seattle five years ago, delivering fresh produce such as eggs, strawberries and meat with its own fleet of trucks.
Amazon is now planning to expand its grocery business outside Seattle for the first time, starting with Los Angeles as early as this week and the San Francisco Bay Area later this year.
If those new locations go well, the company will launch AmazonFresh in 20 other urban areas in 2014, including some outside the United States.
Amazon is searching for new, large markets to enter. The grocery business in the United States, which generated $568 billion in retail sales last year, may be a ripe target.
Amazon's expansion plans are a potential threat to grocery chains such as Kroger Co, Safeway Inc and Whole Foods Market, as well as general-merchandise retailers Wal-Mart Stores Inc and Target Corp, which also sell a lot of groceries.
Amazon is not alone in wanting to expand in the online grocery business.
Wal-Mart is testing same-day and next-day delivery of online grocery and general merchandise orders in the San Francisco Bay Area and operates a grocery delivery business in Britain.
"We are ready and able to expand grocery delivery in the U.S. as the market demands," Wal-Mart spokesman Dan Toporek said.
FreshDirect delivers food to homes and offices in some parts of New York City and its trying to expand its service into the Bronx.
from Reuters
