Amazon Planned Discount Retail Chain Prior To COVID-19 Pandemic: Report

Amazon.com Inc. AMZN was reportedly exploring the possibility of opening a chain of brick-and-mortar retail stores to sell its unsold inventory at discounted prices in early 2020, but shelved the idea when the COVID-19 pandemic took root.

The Abandoned Plans: According to a Bloomberg report citing “two people familiar with the plans,” the e-commerce giant was considering a variety of options ranging from permanent retail locations to pop-up stores in malls and parking lots.

“It’s a way to be able to clean out warehouses, and get through inventory without having to destroy it,” said one of the unnamed people sourced for the report. “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 is not a stranger to brick-and-mortar retail: it first opened a bookstore chain in 2015 and later opened the cashier-less convenience store Amazon Go; the electronics and home goods store, Amazon 4-Star; and the Amazon Fresh grocery chain. The company currently operates 96 brick-and-mortar stores and seven mall pop-up stores under its brand and more than 500 Whole Foods Market supermarkets.

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A Potential Partnership: While the new report claimed the company turned its attention away from new brick-and-mortar operations because of the impact of the pandemic on traditional retailing, Amazon had been approached during the middle of the pandemic to consider converting unused retail space into distribution hub warehouses.

Last August, the Wall Street Journal cited anonymous “people familiar with the matter” in reporting Amazon was in talks with Simon Property Group Inc. SPG to take over anchor department stores that became empty when major retailers including JCPenney (owned by Simon) and Sears Holding Corp. SHLDQ began to shut down their operations. At the time the article was published, the Simon malls had 63 Penney and 11 Sears stores, with both companies winding down their retail presence after respective bankruptcy filings.

The article stated it was uncertain how many stores were being considered for Amazon, which ultimately decided not to pursue the partnership.

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(Photo by Mike Mozart / Flickr Creative Commons)