The world's largest e-commerce company, Amazon, has officially launched a new private-label grocery brand, 'Amazon Grocery,' targeting consumers who prioritize 'value for money.' This move is interpreted as a strategy to capture the wallets of consumers who have become price-sensitive due to recent high inflation and to expand market share in the increasingly competitive U.S. grocery sector.
Brand Consolidation and Maximizing Price Competitiveness
On the 1st (local time), Amazon announced that the 'Amazon Grocery' brand will be newly launched by consolidating its existing grocery brands: 'Amazon Fresh' and 'Happy Belly,' which focuses on basic staples.
The most notable feature is its overwhelming price competitiveness. The new brand includes essential groceries, encompassing dairy products, fresh produce, and meat, with most products priced at under $5. Amazon emphasizes that this will help consumers save on their grocery budgets by purchasing high-quality products—from fresh food and snacks to essential groceries—at low prices without compromising on quality or taste.
Customers can purchase these 'Amazon Grocery' products not only through the online store but also at Amazon Fresh physical locations.
Streamlining Grocery Business and Accelerating Market Penetration
This launch of a low-cost brand comes as Amazon is restructuring its grocery business and improving efficiency. Amazon has continually experimented with low-cost private-label brands, such as the trial launch of 'Amazon Saver,' a brand that also 'focused on value,' in September of last year.
Recently, Amazon has been working to streamline its grocery stores, including closing some of its cashierless 'Go' convenience stores and 'Fresh' supermarkets in the UK. Simultaneously, it is accelerating the strengthening of its online competitiveness. Last month, it significantly expanded the regions where its fresh food same-day delivery service is available across the U.S., making it easier to add fresh items like meat or eggs when placing an online grocery order.
This is interpreted as a multi-pronged effort by Amazon to keep its massive competitor in the U.S. grocery market, Walmart, in check and to find a breakthrough in the grocery sector, which has been stagnant even after the acquisition of Whole Foods Market. The outcome of Amazon's move to maximize logistics and organizational synergy through a 'One Grocery' strategy, encompassing both online and offline, is highly anticipated for its potential impact on the U.S. grocery market landscape.
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