Amazon is planning to launch a new grocery business that is separate from its current Whole Foods Market and e-commerce operations.
The Wall Street Journal reported Friday that the company plans to open its first grocery store in Los Angeles as early as the end of the year. Amazon has already signed leases for at least two other grocery locations with openings planned for early next year, the Journal said.
It is unclear whether the new stores would be bannered as Amazon stores, according to the report.
Amazon is also exploring an acquisition strategy to widen the new supermarket brand by purchasing regional grocery chains with about a dozen stores under operation, the Journal said.
Amazon is now in talks to open grocery stores in shopping centers in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, the Journal reported.
The new stores will offer products at a lower price point, the Journal said. The new chain would offer a different variety of products than what is on the shelves at the more upscale Whole Foods Market stores.
After the Wall Street Journal reported news of Amazon’s plans, the stocks of other supermarket operators fell, with Kroger dropping 3.6 percent on the day, Walmart down 1 percent and Sprouts Farmers Markets losing 1.1 percent. Amazon rose 1.4 percent.
Amazon.com and Whole Foods Market together have a roster of dozens of food and non-food private brands.