Amazon.com (NASDAQ:AMZN) already made news back in June when it announced its same-day grocery service, AmazonFresh, was branching out from its headquarters in Seattle and expanding to certain parts of Los Angeles. Although it looked like the grocery delivery service was set to stay put on the West Coast for a while, a recent Amazon purchase highlighted by All Things D might now suggest otherwise.
The e-commerce retailer’s developer partner already recently purchased a 964,000-square-foot facility near New York City, driving analysts to predict that AmazonFresh could soon be coming to the region, and now, recent job listings suggest that a new location in Avenel, New Jersey is also set to soon open, spurning even more speculation about the possibility of an East Coast Amazon delivery service. The town in the Garden State is about 20 miles from the center of New York City, and thus, could easily service New York City residents as well as northern New Jersey customers. Amazon has also already posted job listings for both the Avenel and NYC locations, which has demonstrated its readiness to kickstart the operation.
Amazon’s recent purchases and listings suggest that AmazonFresh could be preparing to serve customers in the New Jersey and New York region — but none of these plans have been confirmed. All Things D reminds us that New Jersey’s governor already announced in 2012 the openings of two new Amazon warehouses in the state, so while it is still possible that this new Avenel location has nothing to do with the grocery service, speculation is still bubbling.
Still, especially since it just recently expanded to Los Angeles, it seems fishy that Amazon is interested in purchasing two major warehouses, equipped with refrigeration, so close to each other. New York City residents are also considered a gold mine when it comes to grocery delivery services, so it is unsurprising that Amazon is antsy about getting in on the market that grocers like FreshDirect and Peapod have already broken into. While Peapod is still relatively new, FreshDirect has already realized significant success in the region and posted $400 million in sales there last year.
The same-day grocery business has definitely been on the upswing as of late. Not only are AmazonFresh, FreshDirect, and Peapod now servicing customers, but the product of a startup founded by Apoorva Mehta, Instacart, is also new on the scene. For now, Instacart is only available to customers in the San Francisco area, but it promises to cut Amazon’s price tag in half, offering the same service for only $99 per year as long as orders exceed $35.
These grocery retailers bank on two things: lazy customers and the proclivity to buy more if consumers are ordering online, and so far, they seem to be reaping the benefits.
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