Amazon is entering the grocery delivery business with its bid to buy Whole Foods Market Inc. for $13.7 billion but industry insiders say that it’s going to be a long and costly process for Amazon to revolutionize grocery delivery the way they revolutionized online retailing.
Not As Much Warehouse Space As Wal-Mart
Even though Amazon is well known for having a large amount of warehouse space, one key challenge that Amazon faces is the relative scale of its warehousing for the Whole Foods business. According to logistics consulting firm MWPVL International Inc., for example, Amazon has 3 million square feet of U.S. warehousing dedicated to its Amazon Fresh and Prime Pantry grocery programs. This is only one-tenth of the warehouse space that Wal-Mart has for specialized food distribution.
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