Most grocery stores have their own brands, even the small to medium regional stores. So this should not come as a surprise that a large store will develop its own brand.

What I do want to see is the packaging. Most items are meant to be sat on shelves, and displayed to the consumers. But Amazon items won't need to sit on store shelves (just distribution centers) and don't need the packaging to sell themselves. Will Amazon come up with novel packaging optimized for delivery, or will it be more of the same?

I've inadvertently purchased a lot of low quality junk from Amazon lately propped up by fake reviews and shady third-party dealers peddling counterfeit goods. If they want to sell me vitamins and food, they need to fix their brand. Are they a supermarket that is in control what they sell, or are they a back-alley bazaar that's strictly buyer-beware?

This should surprise no one. Do you purchase things? Amazon's goal is to sell you them. Then, after it figures out how you buy them, they'll work their way up and down the supply chain to improve their margins. Done.

Disclaimer: Former Amazon employee

This is how Standard Oil completely dominated their market, vertical integration brought prices so low no-one could compete.

Once same-day delivery and/or drone delivery takes off I predict the grocery store market will start to look similar to retail music/book stores.

I cannot foresee how this will play out in the long term for the end consumer. In the short term, consumers get a whole lot of convenience and lower prices. What happens after a large chunk of other stores have gone out of business? How would any new player even approach entering the market? It almost seems impossible unless Amazon systematically screws up and leaves a gap for someone to exploit.

Amazon already has their "Amazon Basics" line of products for common items. Groceries should come of no surprise.

Curious, will such a move by Amazon make 3rd party sellers fear them more and move to other marketplaces like jet.com or ebay.com? Given amazon's margins really come from its marketplace, they might cannibalize that? Yes, amazon's value for 3rd party sellers is its massive distribution compared to others but its a supply/demand game. If 3rd party sellers start to move to other platforms, maybe jet/ebay can spend more to acquire more demand?

Given the recent problem with fakes on Amazon I worry when they move to food - in China they now fake even eggs, rice, amongst others - how will they stop that getting started sold to their customers?

This is part of Amazon's broader strategy to completely upend traditional retail. I wouldn't be surprised if Amazon follows up by launching physical stores in city centers to shelf these private label items, in addition to its Kindle, Fire TV and Echo products. I can also see Amazon stocking online best-seller items in these stores and have the stores act as last-mile pickup locations and drone delivery centers. Just think about the amount of foot traffic these Amazon stores would generate!

I'm suprised no one had mentioned instacart in this thread. Instacart has partnered with 12 grocery chains in SF. Many of them (including wholefoods) pay instacart commission and there prices are the same as in-store. With these partnerships, instacart could deliver greater diversity of products at lower costs.

They've got a long way to go to, but are building a formidable counter to Amazons grocery play.

What a stupid idea...

At the point where globalisation is proving to be a very bad idea, amazon comes out with this.

I will never use this service that's for sure.

I went ahead and put a trailing stop loss $5K short position on Amazon a couple days ago. I'm of the opinion Amazon is an amazing scam. http://investmentresearchdynamics.com/amazondotcon/

Digital wal mart is coming for our grocery stores.

I wish I could say that this decision is why I quit AmazonPrime and quit doing business with them already, but I already chose to do that due to how badly they treat customers, how high their prices are, and how limited their selection is.

Amazon doesn't provide useful value to consumers anymore, and before they roll out any more services or private label products, they should step back and see why all their customers are jumping ship (yes, quite a few people already have).

Edit: For those downvoting me, explain why you think I shouldn't have quit Amazon. They do not have good pricing, they don't have a good selection for a lot of things I want to buy, the Subscribe & Save and Pantry programs are extremely limited, and they keep shoving programs I can't use at me (Kindle related stuff, their Netflix and Google Music clones, etc).

I don't see the point in paying a per item price premium on top of a $100/yr fee for what amounts to a broken UX.