Amazon is testing a grocery store model in Seattle that works without checkout lines.

Called Amazon Go, shoppers scan their Amazon app when they enter the store, and then sensors register items that shoppers pick up and automatically charge them to the Amazon app.

If a shopper puts the item back they aren't charged.

The store offers ready-to-eat meals, staples like bread and milk and meal-making kits.

The store is in testing and is open to Amazon employees on a trial run. It is expected to open to the public in early 2017.

The e-commerce powerhouse has also been dipping its toe into the physical realm. It has opened three bookstores in California, Oregon and Washington with traditional check outs. Two more are in the works in Illinois and Massachusetts.

Cowen & Co. analyst John Blackledge says the new grocery store is just one way that Amazon has been setting its sights on the food and beverage category, a lucrative $795 billion market. It also offers grocery delivery in some markets and Prime Now for last-minute items delivered in one or two hours.

"We are encouraged by Amazon's growing footprint in this category, which we see as ripe for potential disruption given younger demos increasingly purchasing food and beverage grocery items via digital channels," Blackledge said.

Amazon.com Inc. shares rose $18.69, or 2.5 percent, to $759.03 in afternoon trading Monday. Its shares are up almost 13 percent since a year ago.

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