Amazon Could Spend $3 Billion on 'Go' Stores, Analyst Says

Amazon believes that its Go chain can quickly reach 3,000 inner-city stores

Amazon believes that its Go chain can quickly reach 3,000 inner-city storesLINDSEY WASSON REUTERS

However, that could all change in the coming months as Amazon is thought to be considering opening thousands of new Go stores over the course of three years.

Amazon opened its first Amazon Go store in its hometown of Seattle in 2016.

AmazonGo stores do not have cashiers.

Amazon Go sells an array of prepared food alongside grab-and-go convenience-store grocery staples.

Adding 3,000 convenience stores would make Amazon Go among the biggest chains in U.S. The internet giant is considering plans to have about 10 locations open by the end of this year, about 50 locations in major metro areas in 2019, and then as many as 3,000 by 2021, said the people, who requested anonymity discussing internal plans. A fourth AmazonGo opened Monday in Chicago and there are plans to open a fifth in New York City.

Amazon Go is Amazon's cashierless store, which features what it calls "just walk out" technology and payment through its proprietary app.

"We don't comment on rumors or speculation", an Amazon spokesperson said in a statement late Wednesday. Prepared foods also have wider profit margins than groceries, which would help decrease the time it takes for the stores to become profitable.

It opened to the public in January 2018.

It said shoppers use a smartphone app to enter the store and once they scan their phones at a turnstile, can choose from a range of salads, sandwiches, drinks and snacks. Food offerings include ready-to-eat breakfast, lunch, dinner and snack options made by the company's chefs and local kitchens and bakeries.

Deeper into the store, shoppers can find a small selection of grocery items, including meats and meal kits. Once we walked out, we received an email that we were charged for our items.

Such an expansion could put Amazon back into an investment cycle.

Amazon, famous for dynamic pricing online, has printed price tags just as traditional brick-and-mortar stores do.

The original AmazonGo in downtown Seattle required more than $1 million in hardware alone, a person familiar with the matter has said.

That's a far cry from Google and Facebook, which have long maintained a digital ad duopoly, though Amazon is still expected to come in third.

"Amazon is fully aware that they have to be much bigger in consumables and that omnichannel is what's going to work in consumables".

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