Amazon.com Inc. is reportedly planning to develop a new "drive-thru" grocery concept with the first store to be deployed in Sunnyvale.
According to the Silicon Valley Business Journal, industry sources familiar with Amazon's plans revealed that the new "drive-thru" grocery concept will allow consumers to order their groceries online and then schedule a pick-up time at a designated facility. The site noted that if the news are true, this will mark a new distribution strategy for Amazon, and at the same time, present a threat to the grocery retail industry.
Real estate sources also told Silicon Valley Business Journal that Amazon is eyeing Sunnyvale as the first location for the new concept. Plans submitted by real estate developer, Oppidan Investment Co., indicated that a new 11,600-square-foot building and grocery pick-up area will be developed at 777 Sunnyvale Saratoga Road. Although Amazon's name is not listed on the planning documents, sources familiar with the company's concept said that the Amazon is the likely tenant.
The site tried to get in touch with both Amazon and Oppidan to confirm the news. Unfortunately, the e-giant representatives reportedly did not return a message, while the third party developer declined to comment on the project. Silicon Valley Business Journal also contacted city officials about the submitted plans but they were not able to confirm the tenant's identity.
Meanwhile, Fortune stated that while there is a lot of opportunity for e-commerce in the grocery industry, the tech industry has had little success in getting consumers to switch to online grocery shopping. A study completed by customer science company, Dunnhumby, showed that online sales penetration in the U.S. is only at 0.9 percent in 2014, reports Supermarket News. The Dunnhumby report tracked consumer habits of shoppers across 14 countries in Europe, Asia and the Americas. The company considered the U.S. an emerging market in online grocery shopping, along with other countries such as China, Poland, Ireland, Japan, among others. These countries also posted that same 0.9 percent share in online sales.
Amazon.com Inc. has yet to comment on the rumored drive thru grocery concept.
