It's clear Amazon.com Inc is looking to become a player in the grocery business. The e-commerce giant has been quietly testing its grocery services in its hometown of Seattle for at least five years. It delivers fresh food such as eggs, strawberries, and meat with its own fleet of trucks.
NBCNews.com reports Amazon is now planning to expand its grocery business outside Seattle for the first time, starting with Los Angeles as early as this week and the San Francisco Bay Area later this year, according to the two people who were not authorized to speak publicly.
While food is a low-margin business, Amazon could outperform similar online grocery services by delivering orders for higher-margin items like electronics at the same time.
One of the people familiar with AmazonFresh's expansion plans said new warehouses will have refrigerated areas for food, but also space nearby to store up to one million general merchandise products, in some cases.
If those new locations go well, the company may launch AmazonFresh in 20 other urban areas in 2014, including some outside the United States, said one of the people.