[ad_1]
The purchase by Whole of Amazon from Whole Foods in 2017 has caused a shockwave in the grocery sector and has weighed on stocks in traditional grocery stores.
Eighteen months later, Whole Foods stores do not look very different.
Prices were a bit cheaper for a while, then went up again. Stores began offering new services, including pickup and door-to-door delivery, but grocery stores such as Walmart and Kroger were already well ahead of Amazon in deploying these options.
For a while, it seemed that initial speculation regarding Amazon's impact on the grocery sector was exaggerated.
But all this could soon change.
Amazon is planning to launch a new chain of grocery stores, and it looks like this could become the decisive threat that analysts expected when the online trading giant bought Whole Foods.
The new stores will be smaller and cheaper than Whole Foods, and will offer a wider product line than the organic grocery chain, according to a Wall Street Journal report, which quotes people familiar with the subject. Stores will also focus on convenience and curbside recycling, the report says.
This is bad news for traditional grocers, including Walmart, Kroger and Aldi.
Grocery stores are low-margin businesses and any additional price pressure by a new Amazon chain could reduce profits.
"Amazon clearly has a significant opportunity in the middle of the market, which a new concept could serve well," commented KeyBanc Capital Markets analyst, Edward Yruma, in a note addressed to customers. "This also gives Amazon the ability to use a subset of the technology employed by Amazon Go in a larger box."
But Amazon would still have a long way to catch up to conquer market share in major grocery chains. Walmart has more than 4,000 stores in the United States and about half of them offer grocery shopping along the street. Kroger has more than 2,700 stores and Aldi, more than 1,800 stores.
That said, we know that Amazon is evolving rapidly. In just a few short years, the company has established a vast distribution network capable of competing with carriers such as FedEx and UPS.
"Since the acquisition of Whole Foods by Amazon, grocery retailers are waiting to see if Amazon would open its own branded stores – and that day is finally coming," said Sylvain Perrier, CEO of the eCommerce platform. Mercatus, in an email. declaration. "Amazon grocery stores will certainly use their large customer data to merge their in-store and online grocery store experiences.As Amazon has the ability to make some strategies the industry standard, grocers will have problems if they do not invest a lot in their practical digital products and find effective ways to complement in-store and digital experiences. "
[ad_2]
Source link