AmazonAmazon is plotting to open physical department stores as it steps up its assault on bricks-and-mortar rivals.

The e-commerce giant is expected to launch branches selling its own-label merchandise including fashion and gadgets, as well as branded goods from other suppliers.

The first stores to open could be located in California and Ohio, spanning 30,000 square feet – smaller than most department stores but larger than most of its existing grocery shops, according to the Wall Street Journal.

Analysts speculated that the company would eventually bring the project to the UK if it proves successful. The proposals come after a string of department chains went bust on both sides of the Atlantic owing to changing shopping habits driven in large part by Amazon itself. The move sent a shudder through US retail stocks as Amazon seeks to cement further its leading position in the industry.

Target slumped more than 2pc, Best Buy fell 1.8pc and Walmart dipped about 1pc before making up some ground.

Amazon’s retail sales have surpassed Walmart’s for the first time according to estimates released this week by data firm Factset, making it the world’s largest retailer outside of China.

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