Amazon is launching a new brand of grocery stores to effectively compete with established chains offering a lower price point. HEB, Safeway Kroger, Publix and others come to mind. This allows Amazon to maintain Whole Foods as a premium brand.
Grocery delivery is also growing rapidly with companies offering to shop and deliver within the hour. This is important due to refrigerated items such as ice cream and milk. Amazon wants to own a large piece of this market and this is a major reason for the launch of the new grocery brand