Why Amazon plans to open 3,000 cashierless stores by 2021

By , in Companies on .

E-commerce giant Amazon is reportedly planning to open at least 3,000 cashierless Amazon Go stores by 2021, threatening traditional grocery stores and even casual dining restaurants in the United States.

CNBC said customers of automated grocery stores can “simply scan their Amazon Go apps as they walk into the spaces — which are roughly 2,000 square feet — pick up whatever they want, and walk out.”

However, Amazon refused to confirm or deny these reports as they “do not comment on rumors or speculation.” Still, the slightest rumor has brough shares of grocery and retail rivals lower, according to Bloomberg, as “Target Corp. dropped about 1.5 percent and Kroger Co. slid as much as 3.1 percent.”

Bloomerberg described the Amazon’s reported plans as “aggressive” and a “costly expansion” that could threaten convenience stores such as 7-Eleven, Subway, taco trucks, among others.

“Such an expansion could put Amazon back into an investment cycle. Bezos is willing to lose money on long-term initiatives when he smells opportunity. Amazon Web Services, the company’s fast-growing and profitable cloud-computing business, was unprofitable for years and Bezos stuck with it, according to a person familiar with the matter. Amazon also routinely loses money expanding internationally,” Bloomberg added.

CNBC said that as of now, there are Amazon Go stores that sell prepared food items such as sandwishes, salads, and granola bars to name a few. They plan to build 10 more Amazon Go stores by the end of the years, and aims to have 50 more by 2019.

The Verge said Amazon could “begin seriously eating into the traditional grocery, restaurant, and household good markets” in the near future.

Amazon, the Verge added in its report, “is already threatening those types of businesses with its push into grocery delivery, same-day delivery of household goods, and the strengthening ties between Whole Foods’ nationwide network of stores and its Prime subscription service.”

“And if Go becomes a dominant force in major metropolitan centers in the US, it could make Amazon a threat to every CVS, 7-Eleven, and fast casual dining establishment in the country,” the report added.