• by Tanya Gazdik , 4 hours ago

Amazon is testing merging Whole Foods offerings with Amazon brands in a “store within a store.’

“Amazon announced Wednesday a new concept for its Plymouth Meeting, Pennsylvania Whole Foods — featuring a 10,000-square-foot micro-fulfillment center powered by Silicon Valley startup Fulfil,” according to Axios. “The move underscores Amazon's ongoing effort to find a profitable formula in groceries.”

The concept uses a robotic fulfillment center behind the scenes with an automated system pulling from more than 12,000 products, including national brands not normally found at Whole Foods, like Tide and Pepperidge Farm.

“In-store shoppers check out their Whole Foods groceries as usual, but order national brands like snacks or cleaning supplies separately through QR codes or the Amazon app,” according to Axios. “Amazon-ordered items are ready within minutes at the Amazon Pickup & Returns Counter.”

Pickup is free for all customers, while delivery costs $9.95 unless Prime members subscribe to Amazon's grocery delivery add-on plan. 

“The micro-fulfillment system represents a significant leap in retail automation,” according to WebProNews. “This isn’t just about speed; it’s about expanding inventory without expanding physical space, a challenge for urban grocery locations.”

Amazon plans to refine and expand this offering to additional stores over time.

Visitors to the Plymouth Meeting store describe a hybrid experience: browsing Whole Foods’ aisles for fresh produce and then seamlessly adding Amazon items via app, according to WebProNews. “It’s like having Amazon Prime delivery right in the store,” noted one shopper in a post on X, reflecting broader sentiment captured in recent social media discussions.

“To enable this expanded selection, Amazon constructed a 10,000-square-foot automated microfulfillment center within the store’s existing back-of-house area,” according to Retail Touchpoints. “The new concept, first announced in October 2024, is designed to make grocery shopping easier, turning Amazon’s flagship brick-and-mortar banner into a one-stop shop for grocery needs.”

While the concept may come under fire from brand purists, it is an appropriate response to customer demand, says Neil Saunders, managing director of GlobalData.

"The reality is that very few Whole Foods shoppers get all their grocery and household needs from the chain,” Saunders said in a statement. “Many use Whole Foods as a top-up or treating destination and then go on to buy common household brands from other retailers like Target, Walmart and Kroger.”

Amazon wants to capture more of this spending for itself and to improve convenience for its shoppers. 

“At the same time, it is also very conscious of not diluting the brand of Whole Foods,” Saunders says. “The result is a compromise hybrid store where the main Whole Foods offer remains intact but with a bolt-on fulfillment center from which consumers can get more mainstream brands.”