Amazon is reportedly testing new approaches to merge its Whole Foods and Amazon Fresh grocery operations in the US, aiming to create a more integrated shopping experience for customers across its various food retail businesses.

According to the Wall Street Journal, e-commerce giant has begun fulfilling Whole Foods product deliveries from 26 Amazon Fresh fulfillment centres, with plans for further expansion. The company is also developing innovative store formats, including a planned microfulfillment centre at a Whole Foods store in Plymouth Meeting, Pennsylvania, which will stock Amazon Fresh groceries and household items.

In Chicago, the company has launched a new concept called Amazon Grocery, a 3,800-square-foot standalone store located near an existing Whole Foods location, representing another experiment in blending its retail offerings.

The news follows the recent departure of Tony Hoggett, Amazon senior vice president of worldwide grocery stores, last month.

The initiative comes as Amazon attempts to compete in the $1.5 trillion US grocery market, where it faces stiff competition from established retailers with extensive store networks. Walmart, the country's largest grocer, operates about 4,600 stores across the US, with locations within 10 miles of 90 per cent of the American population.

The strategy shift follows several recent changes in Amazon's grocery division, including the October departure of its grocery head and the closure of at least five grocery-dedicated warehouses this year. The company has also introduced an unlimited grocery-delivery subscription service in the US and opened several new Amazon Fresh locations.

Online grocery shopping has seen significant growth since the pandemic, with digital sales now accounting for 10.3 per cent of all US grocery sales, up from 5.3 per cent in 2019, according to consulting firm Bain & Co.

Meanwhile, Amazon is expanding its grocery ambitions internationally, announcing a new partnership with European e-grocery retailer Knuspr to offer delivery services in Germany. The collaboration will initially launch in Berlin, offering Amazon Prime members access to more than 15,000 items through Knuspr's fulfilment technology.

"We are excited to offer Knuspr grocery deliveries to our Prime members in Germany," says Ganesh Rao, Amazon's grocery international vice-president. "Knuspr offers a broad, regionally focused assortment, and fast, flexible deliveries and this partnership reinforces our commitment to bringing together low prices, vast selection, fast delivery options that Amazon customers know and love."

---