The Motley Fool·2026-02-27 09:15Core Viewpoint - Amazon is planning to open a 225,000 square-foot superstore outside of Chicago, aiming to compete directly with Walmart in the grocery and general merchandise sectors [2][5]. Group 1: Amazon's Retail Strategy - This new superstore will offer groceries, consumer goods, and general merchandise, indicating a significant shift in Amazon's retail strategy [2]. - Amazon's previous attempts at brick-and-mortar retail have seen more failures than successes, including the closure of all 72 Amazon Go and Amazon Fresh stores and 68 bookstores in 2022 [4][7]. - Despite past failures, the suburban megastore concept may have the best chance of success, as it aligns with proven retail formulas [5][8]. Group 2: Competitive Landscape - The retail space is highly competitive, with established players like Walmart, Target, and Costco already present [5]. - Walmart operates 5,212 stores in the U.S., highlighting the challenge Amazon faces in gaining market share [5]. Group 3: Advantages of Amazon's Model - Amazon has established relationships with suppliers, with nearly 40% of its e-commerce revenue coming from its own merchandise, which could enhance the product offerings in its physical stores [9]. - The company's logistics network allows for efficient delivery and inventory management, which could support the success of its brick-and-mortar locations [10]. - With 200 million Amazon Prime subscribers in the U.S., there is potential to drive foot traffic to stores and increase overall sales [11]. Group 4: Market Opportunity - The U.S. Census Bureau reports that 84% of domestic retail spending, approximately $6 trillion, still occurs offline, presenting a significant opportunity for Amazon to capture this market [12].