Amazon Was Reportedly Considering a Chain of Discount Stores Before the Pandemic Hit

Amazon Was Reportedly Considering a Chain of Discount Stores Before the Pandemic Hit
Photo: Philippe Lopez, Getty Images

Another purported casualty of the coronavirus pandemic has surfaced, folks: Amazon brick-and-mortar discount stores. Yep, the e-commerce giant considered opening up permanent retail locations to peddle unsold inventory before the world descended into lockdown, Bloomberg reported Thursday.

While the fallout from covid-19’s spread has shuttered a record number of stores across America and recent consumer surveys suggest that folks are increasingly opting out of shopping in person, as they have been for years now, discount chains are some of the few brick-and-mortar stores weathering this larger retail meltdown. And if any company has enough billions in capital and resources to throw at such a venture, it’s Amazon. The company took in more than $US1.5 ($2) billion in sales during the last quarter of 2020, according to Statista.

Preliminary discussions for a potential discount chain were underway in 2020, but after the pandemic started to ramp up worldwide, Amazon pivoted focus to maintaining day-to-day operations and expanding its new line of Amazon Fresh grocery stores, sources familiar with the matter told Bloomberg. Apparently, the idea was these discount stores would help liquidate any unsold stock already taking up space at Amazon’s warehouses. Each would carry stock similar to Amazon’s 4-Star stores, a chain that markets some of its most well-reviewed products, and sell a mix of severely marked down electronics and home goods with an emphasis on items that take up minimal square footage on the show floor.

“It’s a way to be able to clean out warehouses, and get through inventory without having to destroy it,” one of the people briefed on the plans told the outlet under the condition of anonymity. “It is keeping with the value proposition of Amazon, keeping price at the forefront and allowing customers to get access to products at low cost.”

Amazon has steadily pushed into physical retail over the years, beginning with a line of bookstores in 2015. It’s since rolled out dozens of grocery stores, temporary retail locations, and cashless convenience stores across the U.S. Not to mention all the dirt-cheap retail space Amazon has leveraged through the dying malls it helped kill off to make way for pop-up shops and fulfillment centres (Yeesh, talk about adding insult to injury).

Amazon declined requests for comment from both Bloomberg and Gizmodo. “We don’t comment on rumours or speculation,” a company spokesperson told us via email.

As Bloomberg notes, Amazon already markets discounted inventory online through its Amazon Outlet program, while returned or used items are sold on its Amazon Warehouse page. A chain of discount stores would certainly open up more opportunities for Amazon to secure any sort of return, no matter how small, on unsold items burning up precious real estate in its fulfillment centres. But perhaps the company should focus instead on addressing the reportedly appalling and inhumane workplace conditions that literally get workers killed at its existing warehouses before it sets its eyes on yet another brick-and-mortar operation. Then again, we all know aggressively pursuing its $US1.5 ($2) trillion bottom line will always be Amazon’s first priority.