Amazon.com Inc plans to open dozens of grocery stores across the United States as it looks to expand in the food business, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Amazon is also exploring an acquisition strategy to strengthen its new supermarket brand by purchasing regional grocery chains, which have at least a dozen stores under operation, according to the report.
The company, which bought the upscale Whole Foods chain for $13.7 billion in 2017, is now in talks to open grocery stores in shopping centers in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, the WSJ report said.
The online retail giant plans to open its first store in Los Angeles as early as the end of the year, and has already signed leases for at least two other grocery locations with openings planned for early next year, the Journal reported.
Shares of grocers such as Costco and Walmart were down about 1 percent each on the news, while Kroger traded down nearly 4 percent. Amazon was up 1.4 percent.
Amazon declined to comment.
The new stores are not intended to compete directly with Whole Foods and would offer a variety of products compared to the more upscale chain, according to the report.
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