Amazon lays down challenge to the supermarkets

E-commerce giant Amazon has opened a bricks-and-mortar grocery store in Seattle without lines or checkout counters, kicking off new competition with supermarket chains.

Amazon Go, the online shopping giant's new 167-square-metre store, uses sensors to detect what shoppers have picked off the shelf and bills it to their Amazon account if they do not put it back.

The store marks Amazon's latest push into groceries, one of the biggest retail categories it has yet to master. The company currently delivers produce and groceries to homes through its AmazonFresh service.

"It’s a great recognition that their e-commerce model doesn’t work for every product," said analyst Jan Dawson of Jackdaw Research, noting that physical stores would complement AmazonFresh.

"If there were hundreds of these stores around the country, it would be a huge threat" to supermarket chains, he said.

Amazon Go is available now for employees of the company enrolled in its beta program, and is expected to be open to the public early next year, Amazon said.

It was not immediately clear if and when Amazon Go would expand outside Seattle.

"The checkout lines are always the most inefficient parts of the store experience," said Neil Saunders, managing director of retail research firm Conlumino.

"Not only would you save a lot on labour costs, you actually would make the process much quicker for consumers and much more satisfying."

Still, the grab-and-go experience would take getting used to, he said.

Some people may "feel like they stole" an item, Saunders said.

"There is a bit of education needed for consumers."

Apart from groceries such as bread and milk, the store also offers ready-to-eat breakfasts, lunches and dinners made fresh by on-site chefs and local kitchens and bakeries, Amazon said.

That would make Amazon Go a potential competitor to fast-casual dining chains as well.

Amazon Go is not the first physical store for the e-commerce giant. It has a book store in Seattle, as well as pop-ups at malls where it displays Amazon devices such as the Kindle.