Amazon said to be cooking up Pantry service to take on Costco

Internet retailer will offer delivery of about 2,000 products typically found at warehouse stores, according to USA Today.

Amazon going after big-box stores with Pantry service?

Amazon is developing a new retail business venture called Pantry that will offer the same package goods consumers usually visit big-box retailers to purchase, according to a USA Today report.

An expansion of Amazon's Prime shipping program, the service will offer about 2,000 products typically found at warehouse clubs Costco and Sam's Club, according to the newspaper. The service, which will offer items such as cleaning supplies, canned goods, and beverages, is expected to launch in 2014, according to the newspaper's report citing three unidentified sources described as being familiar with the effort.

The online retail giant plans to offer a box of preset size and weight limit in which customers can put as many items as they can fit, according to the newspaper. The service would reportedly reduce the shipping costs for boxes that weigh less than the maximum weight.

CNET has contacted Amazon for comment and will update this report when we learn more.

The move is expected to give Amazon a greater piece of the consumer packaged goods (CPG) market, which is estimated to be worth $850 billion this year. The newspaper notes that much of that spending still occurs in brick-and-mortar stores, suggesting that there's a new sector ripe for domination by the world's largest Internet retailer.

The Seattle-based company already offers a grocery delivery through a service called AmazonFresh, which offers more than 500,000 different items for free same-day and early morning delivery. After tinkering with the local delivery service for five years in its hometown, Amazon delivered the service to Los Angeles in June and expanded to San Francisco this week.

 

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