Amazon (AMZN) is refuting plans to open 2,000 grocery stores under the name Amazon Go. The news is good for grocery chains like Whole Food Markers (WFM) and Sprouts Farmer Markets (SFM) that were already trading at lows due to the overly competitive market. Amazon is going forward with test stores that allow customers to skip the checkout line via the use of the technology to detect when a consumer picks up an item. The benefit could be huge for convenience type items where standing in line for over 5 mins to purchase a couple of items is productivity killing. The upside to Amazon though is questionable as grocery chains already have low margins and simply removing cashiers isn't going to strip out much in the way of costs considering the additional technology expenses. Due to self checkout lanes, my local Wal-Mart (WMT) Neighborhood Market only has 1 cashier most times. Clearly, any big scale entry by Amazon into the grocery sector is negative for the companies, but a stock like Sprouts seems to have limited risk with a produce focused store where the benefits of detection technology would be reduced. Disclosure: No position