Amazon gives food retailers another reason to worry

Amazon’s secret Project X, along with supporting photos and site blueprints, appears to no longer be a secret. Last week Geekwire reported on the construction in Seattle of what it believes to be a new grocery concept where shoppers can pre-order online, or from a tablet in-store, and pick up their groceries at this brick and mortar store. This follows reports of simialr facilities being built in the Bay Area. Few food retailers admit they are not carefully watching Amazon’s foray into grocery, whose total annual e-commerce sales have reached $99 billion (eMarketer says e-commerce in the U.S. will hit $396.72 billion in 2016, or 8.2% of total retail sales). Published reports indicate that Amazon’s current share of U.S. grocery sales is less than 1%, and while some may doubt the company can break through, a new surveyfrom Cowen reports that the number of people who participated in their survey who shop for groceries and other consumable goods via Amazon increased 18% in the first quarter of the year, compared to the same period in 2015. Can Project X be the added service that becomes Amazon’s tipping point to give it a stronghold in this industry?