Amazon to launch its first automated micro-fulfillment center at a Pennsylvania Whole Foods

• For Walmart, that's meant adding more online delivery as well as in-store pickup to its highly successful stores.
• And for Amazon it's meant buying chains like Whole Foods and opening physical stores like Amazon Fresh to complement its mammoth online business.

Driving the news: Amazon announced today that it's working on its first-ever automated micro-fulfillment center at a Whole Foods store in Pennsylvania, where shoppers can buy Whole Foods items while ordering and picking up Amazon products.

• Household items like Tide Pods and Pepsi will be stocked in the back of the Whole Foods location and packed and ready for customers by the time they're done browsing Whole Foods aisles.
• The combined operation is expected to go live by early next year.
• Separately, Amazon is experimenting with putting groceries in a Phoenix same-day fulfillment center so that customers can order things like milk overnight, alongside any other Amazon app orders.

Between the lines: Amazon is finally tapping into its Whole Foods footprint to better compete with Walmart and other grocers while boosting its own logistics network.

• Since acquiring Whole Foods in 2017, Amazon has expanded the chain by about 75 stores to its current 535 locations, and seen sales growth of 40%, the company said.

What we're watching: Trials are just that. Ultimately, not every Whole Foods location will have a micro fulfillment center capability, depending on the way customers shop and the physical infrastructure of the stores.

• "At this point, I don't have the specifics to say that [a micro-fulfillment center] is going to be available in every single Whole Foods Market," Anand Varadarajan, vice president, product & technology of worldwide grocery stores at Amazon, told Axios in an interview on Wednesday.