Amazon to open its first grocery stores on the East Coast

Amazon is opening its first grocery stores on the East Coast, the company confirmed Thursday, in the latest sign of its efforts to upend traditional supermarkets.

The company plans to open two grocery stores. One will be located in Washington, D.C.’s Logan Circle neighborhood and another will be built in the northern Virginia town of Franconia, not far from Amazon’s second headquarters, dubbed HQ2, in the Crystal City section of Arlington.

The D.C. and northern Virginia stores could be just the first of several Fresh stores to land on the East Coast. Other grocery stores appear to be planned for the Philadelphia suburb of Warrington, Pennsylvania, and Chevy Chase, Maryland, according to job postings on Amazon’s website.

It’s unclear whether the stores will mirror the format of Amazon’s recently launched Fresh grocery chain, or when the stores are slated to open. Representatives from Amazon didn’t immediately respond to a request for comment.

Last September, Amazon opened its first Fresh grocery store in Los Angeles’ Woodland Hills neighborhood. It has since opened a handful of other locations throughout Southern California and in several suburbs of Chicago.

Amazon’s Fresh stores look like a traditional supermarket, but also feature some high-tech touches, like smart Dash Carts that let shoppers skip the checkout line and voice-activated Echo Show displays. However, unlike Amazon-owned Whole Foods, Fresh stores are meant to appeal to a broader array of shoppers, by offering products at lower price points than the upscale grocer, as well as traditional staples including Coca-Cola drinks and Kellogg’s cereal. There’s also a dedicated store area for shoppers to pickup and return Prime packages.

Amazon now has 11 Fresh stores in operation and more could be on the way. Last month, Bloomberg identified at least 28 more Fresh locations that are in the works. The company is also testing its “Just Walk Out” cashierless technology at a Fresh store in Illinois, according to Bloomberg.

Since acquiring Whole Foods for $13.7 billion in 2017, Amazon has expanded its ambitions of cracking open the $900 billion U.S. grocery industry, striking fear in the likes of Walmart, Kroger and Albertsons. In addition to the Fresh stores, Amazon also operates a number of cashierless Go convenience and Go Grocery stores.

With its Fresh stores, Amazon appears to be going after “a squarely middle income customer who may shop at both discounters and conventional grocers already,” Morgan Stanley analysts said in a note on Tuesday. Morgan Stanley said the Fresh stores offer “nothing too special” compared to typical supermarkets, but their real value may be as “nodes of fulfillment” that are close to consumers.

“As consumers increasingly demand same day grocery fulfillment (both for delivery and pickup at store), Fresh stores could therefore fill a previously missing hole in AMZN’s grocery fulfillment process while also building AMZN’s brand in food retail,” the analysts wrote.