Published: Thu, September 20, 2018
Markets | By Otis Pena

Amazon considering opening 3000 cashierless stores

Amazon considering opening 3000 cashierless stores

"We see Amazon as having to invest between $0.5 billion and $3 billion in building these 3,000 stores", analysts led by Brian Nowak wrote Thursday.

By rolling out 3,000 Amazon Go stores, Amazon would quickly become one of the biggest chains in the US, Bloomberg said.

If Amazon follows through with the rumored plan, it would pose a threat to convenience store chains like 7-Eleven, which must bear the expense of paying cashiers and other staff, Bloomberg said. Sensors and computer-vision technology detect what shoppers take and bills them automatically, eliminating checkout lines.

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.

Why it matters: While Amazon has ruled the e-tailer business for the past few years, physical stores represent a considerable investment which Jeff Bezos is willing to undertake for longer-term profitability.

Shares of USA supermarket chains Kroger Co (KR.N) and Target Corp (TGT.N) fell between 1 and 2 percent following the news.

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The company unveiled its first cashier-less store near its headquarters in Seattle in 2016.

If a shopper puts an item back on the shelf, Amazon removes it from his or her virtual cart. Focusing on prepared foods rather than groceries could help boost profit margins, and some of the existing stores are already doing that.

The cost of the technology in just one store cost Amazon one million dollars.

Going from just four locations to 3,000 in a few years would constitute a massive jump and make Amazon a leading convenience store operator, rivaling 7-Eleven, Walgreens and CVS.

Speculation of a widespread rollout of Amazon Go isn't the first time the company has been rumored to have plotted a massive expansion into brick-and-mortar stores. It would also change Amazon's business, putting more focus on its physical stores. Amazon is also planning to open one in NY.

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