Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

As per AllThingsD, Amazon.com (AMZN - Analyst Report) is about to launch its online grocery delivery service, AmazonFresh in San Francisco. The service is expected to hit the market on Dec 10, exactly six months after it first expanded out of Seattle and into Los Angeles.

Amazon had quietly introduced AmazonFresh in 2007 in a limited manner near its headquarters in Seattle. The service enables users to order groceries online and get delivery on the same day or the next day, thus saving time and effort.

Though Amazon is not very optimistic about generating high margins from the grocery- delivery service, it expects that this expansion will help to widen its operational activities (shopping) to different categories from electronics to clothes to household essentials.

With a view to make this expansion a success, Amazon has already started investing in warehouses.

Amazon’s expansion plan is likely to pose a threat to other existing grocery chains like Kroger Co (KR - Analyst Report), Safeway Inc (SWY - Analyst Report) and Whole Foods Market (WFM - Analyst Report), as well as other retailers such as Wal-Mart Stores Inc. (WMT - Analyst Report) and Target Corp (TGT - Analyst Report).

Grocery is one of the most difficult sectors to crack, especially when it comes to online shopping as is evident from the now defunct business of Webvan. These endeavors often meet with failure as the operational cost (cost incurred in maintaining infrastructural facilities for delivery on time, warehousing facilities for storage of goods, etc) is exorbitant while margins are low. Also, since the grocery items are mostly perishable in nature so it further increases the chances of wastage and hence, it is not possible to forecast demand too in this sector.

Currently, Amazon has a Zacks Rank #3 (Hold). Better-ranked stocks in the technology sector include Netflix Inc (NFLX - Analyst Report) with a Zacks Rank # 1 (Strong Buy), and Priceline.com Inc. (PCLN - Analyst Report) and Stamps.com Inc. (STMP - Snapshot Report), both with a Zacks Rank # 2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%