American online retailer Amazon is said to take on Costco and Wal-Mart’s Sam’s Club in the US, with its new service offering called ‘Pantry’ that will deliver groceries online.

Amazon has not yet disclosed its plans, but people familiar with the matter said that the service is set to launch in 2014. Pantry will be aimed at the existing members of Amazon’s Prime shipping program.

It will initially offer about 2,000 products in a grocery store such as cleaning supplies, kitchen paper rolls, canned goods like pet food, dry grocery items like cereal and some beverages.

This move by Amazon will enable it to expand its reach in the consumer package goods market, pitting it against giants such as Walmart and Costco, which specialize in selling a limited number of items in huge volume at very low prices.

Prime shoppers can include various grocery items into a set sized box, up to a specific weight limit. The items will be shipped for a small fee, if the products fit and they don’t exceed the maximum weight.

Initial reports suggest that at least four fulfillment centers have been designated to store Pantry inventory and process orders.

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By GlobalData