Home / FINANCE / Markets Insider / Even with Whole Foods, Amazon would need many some-more warehouses to reshape grocery smoothness (AMZN, WFM, WMT, UNFI)

Even with Whole Foods, Amazon would need many some-more warehouses to reshape grocery smoothness (AMZN, WFM, WMT, UNFI)

By Jeffrey Dastin

June 23 (Reuters) – If Amazon.com Inc hopes to
revolutionize grocery delivery, afterwards a bid to buy Whole Foods
Market Inc for $13.7 billion will be only a start of a
long and dear process.

The e-commerce hulk would need to supplement a vast network of
specialized grocery placement warehouses, former AmazonFresh
employees and logistics experts said. This is something Wal-Mart
Stores Inc and other competitors have already done.
Whole Foods, with a comparatively tiny placement footprint of
its own, does small to change a design for Amazon, they
said.

Amazon has a small some-more than 3 million block feet of U.S.
warehousing dedicated to a existent AmazonFresh and Prime
Pantry grocery programs – a tenth of a room space
Wal-Mart has for specialized food distribution, according to
logistics consulting organisation MWPVL International Inc.

“AmazonFresh unequivocally was for miss of a improved word an
after-thought,” pronounced Brittain Ladd, who until Mar was a senior
manager for a grocery smoothness program, that launched in
2007.

One pivotal to Amazon’s success in ubiquitous sell sales has been
its speed in delivering products to consumers, facilitated by
warehouses located strategically via a United States.
As of 2016, a association had about 100 million block feet of
space in a accomplishment and information centers, some of it outfitted
with state-of-the-art robotics to boost efficiency.

Facilities for distributing uninformed food are distant more
complicated than typical warehouses. A singular trickery can need
a half dozen or some-more heat settings to residence products from
Popsicles to berries. Some need acceptance from a U.S.
Food and Drug Administration, and additional caring contingency be taken to
keep shelves purify and forestall pests from contaminating food.

Whole Foods has over 1 million block feet of warehouse
space for placement to a markets, and a cube of its
inventory goes true from suppliers to stores, MWPVL said.

“It’s a peanut. It’s nothing,” MWPVL President Marc Wulfraat
said of Whole Foods’ distribution. “If Amazon wants to turn a
dominant grocery association in a brief duration of time, afterwards there
would be an investment required, and it would be big.”

Amazon, that did not lapse requests for comment, has not
detailed a skeleton for Whole Foods.

12 OR MORE GROCERY WAREHOUSES NEEDED

Amazon’s accomplishment losses jumped 31 percent in 2016 – a
bit faster than in before years and faster than a sell sales
growth – to $17.6 billion, according to a annual regulatory
filing.

Industry experts guess a association would have to supplement a
dozen or some-more grocery warehouses, quite if it wanted to
supply Whole Food stores in further to homes. The cost to do
that is unclear.

They pronounced Amazon would expected continue to rest on United
Natural Foods Inc to supply Whole Foods with
hard-to-source products, though would substantially aim to cut costs and
handle some-more of a placement for required items.

Even regulating Whole Foods stores to yield food for delivering
to circuitously civic shoppers would have tough limits, given many
outlets miss a building space to hoop thousands of online
orders.

“It’s a space emanate for things entrance through. It’s a labor
issue for people tripping over any other,” pronounced Tom Furphy,
former clamp boss of consumables and AmazonFresh, and now
chief executive of Consumer Equity Partners. There would also be
a risk that “the peculiarity starts to go down since the
e-commerce orders are removing improved product.”
(Reporting By Jeffrey Dastin in San Francisco; Editing by Sue
Horton and Cynthia Osterman)

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