Amazon is said to be expanding and adding food items to its private label. The move is seen as crucial, as it follows the same business strategy by other giant grocery retailers like Costco, Walmart and Target, the Wall Street Journal revealed Thursday.
Earlier this month, Amazon reportedly filed for trademark protection for its existing Elements brand, covering over two dozen categories of food products such as milk, soup, cereal, baby food, coffee, pasta, cleaning products and other household items, according to Time magazine.
Elements, which was launched by the online site last year, mostly sells baby products to its Prime subscribers. Members of this subscription pay $99 a year and enjoy many offers, including a free two-day shipping arrangement, according to CNET.
While parties declined to comment, Amazon may have also approached TreeHouse Foods Inc. and other private-label food manufacturers for a partnership into this new venture.
This is the first time Amazon will sell perishable items, which raises some concerns. However, profit margin for private-label grocery items has always been regarded as lucrative. Despite retailers selling the items for cheap, there is little expense on marketing cost, according to the reports. In fact, in 2014, consumers in the United States have spent over $120 billion on private-label products, according to a study by Information Resources, Inc.
Amazon already operates Amazon Fresh, a grocery delivery service applicable for orders above $35. Since it began, customers in Los Angeles, Philadelphia, San Francisco, Seattle, New York and San Diego have received and enjoyed their fresh food items on the same day or during an early morning delivery. It is expected that when Amazon's upcoming grocery line rolls out, it will bolster Amazon Fresh's service.
