> Not having a store that your food comes from might make for a safer mental picture, but Amazon is going to go with the cheapest vendor every time, and they don't have the scale of Kroger or HEB to knock prices down anywhere near them, thus they must buy lower quality goods to hit the same price point.
It's a dangerous game to bet against Jeff Bezos losing because Amazon lacks scale and problems hitting price points. Amazon may not have the grocery scale of Kroger today, but it also has billions of dollars to spend, a different cost structure and no need to compete with existing grocery chains completely on price (it's a different service, Kroger won't be at my door within two hours).