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Report: Amazon eyes Whole Foods expansion

Amazon.com Inc. is planning to build additional Whole Foods Market Inc. stores in the U.S. in a bid to extend its two-hour delivery service to more customers in the country, The Wall Street Journal reported Dec. 31, 2018, citing people familiar with the plans.

Whole Foods employees have visited potential retail spaces in parts of Idaho, southern Utah and Wyoming, where the supermarket chain does not have a presence, one of the sources told the newspaper. Some of the spaces were about 45,000 square feet, slightly larger than the average Whole Foods store, the report said.

The report comes ahead of the planned termination of Whole Foods' delivery partnership with Instacart, which will complete its first phase in February 2019. The Journal said Whole Foods is using extra space in its stores to accommodate Amazon delivery and pickup from online orders.

Over the past months, Amazon had been expanding its Whole Foods grocery delivery and pickup service for Prime members to more U.S. markets. The delivery option is available at 63 U.S. cities as of Oct. 24, while the pickup service is available at 22 cities as of Nov. 7.

The e-commerce giant plans to offer both delivery and pickup services to nearly all of its approximately 475 Whole Foods stores in the U.S., another source told the Journal.

Both Amazon and Whole Foods did not immediately respond to a request for comment by S&P Global Market Intelligence.

Seattle-based Amazon acquired Whole Foods for about $13.7 billion in 2017.