Amazon may offer a vast array of products from its flagship website. Credit:AP But Amazon is understood to have yet to commit to opening bricks and mortar grocery stores locally. Amazon caused waves globally recently by promoting its "Amazon Go"concept – a convenience store without checkouts, that electronically tags each product and bills a shopper for their purchases through their smartphone once they exit. The retailer will "launch as many services and products as possible within Australia" as it views the country as an "attractive" market, a recently departed Amazon executive told Fairfax Media. However, it will "build physical grocery stores and launch Amazon Go only after Amazon has become more established in the country and analysis determines the market will support physical stores," said Brittain Ladd, who worked as senior manager, Amazon Global Logistics.

Wesfarmers managing director Richard Goyder: "There is a point that Australia has got significant natural resources and there should be a benefit to businesses in this country," he said. Credit:Philip Gostelow Amazon told Fairfax Media that Mr Ladd did not speak for the company. Amazon already operates in Australia and its expansion has been rumoured for years. Amazon views Australia as an 'attractive' market, according to an ex-employee. Credit:David Ryder But it has recently hired real estate agents to look for distribution centres, leased five floors in Sydney, sought to trademark core products such as streaming service Amazon Prime Video, advertised more than 100 jobs in Sydney, and been the subject of investment bank reports.

Macquarie this week said it could nab $14.5 billion in online sales by 2025, taking share from "department store/discount department store category, electrical/home appliances, sporting goods, apparel and, to a lesser extent, food." Australia's biggest retailers are increasingly grappling with the prospect of competing with a retail giant known for its patience and low margins while it builds market share. Woolworths chief executive Brad Banducci said on Tuesday that Amazon had "been here for many years and has been a robust competitor". But he said greater investment by Amazon did "focus the mind wonderfully on another megatrend: extreme convenience" and that Amazon now accounts for a remarkable 55 per cent of food product searches in the US. Woolworths announced last year it had set up a separate unit on Amazon. Richard Goyder, the outgoing chief executive of retail giant Wesfarmers, said in February, "We're not worried about Amazon or anyone else."

Mr Ladd, when working for consultants Deloitte years ago, advocated Amazon roll out a different kind of supermarket – a so-called "multi-format store" – in order to get a bigger slice of grocery sales. Amazon is considering this kind of store in Australia. The stores would be smaller than a typical Woolworths or Coles store and similar in size to an Aldi store, he said in a piece called "A Beautiful Way to Save Woolworths." It would stock only the items people like to inspect before purchasing, namely fruit and vegetables, meat, dairy and alcohol. But customers would still be able to buy tens of thousands of products through an app or an instore kiosk or touchscreen. These products would not be stocked on shelves. Instead, they would be stored in nearby fulfillment centres, for delivery to the customer's home.

Customers would also have the option of ordering groceries online and then using drive-through lanes to pick up their groceries from the store. This "multi-function" store design would increase sales per square metre – an important metric for retailers. Mr Ladd told Fairfax Media, "Australian consumers will embrace online grocery ordering and delivery from Amazon. And I believe Amazon's retail store formats such as Amazon Fresh Pick Up or the multi-format store can be successful in Australia and south-east Asia." Broker Credit Suisse this month said, "Whilst Australia is probably not a high priority market due to its small population, Australia has many characteristics potentially attractive to Amazon and no insurmountable entry barriers. "Attractions include a growing, high-income population; population concentrated in a relatively small number of cities and adequate population density; high internet penetration and online shopping propensity; high retail labour costs; and attractive retail sector profitability.

"The broad-reaching impact of Amazon on Australian retail appears to be under-appreciated. "Amazon would be likely to reach a critical mass of third-party sellers within 12 months of entry. Five years from entry, Amazon would be likely to have reached a better than 5 per cent market share in many categories." CORRECTION: An earlier version of this story has been amended to make clear that Mr Ladd no longer works at Amazon.