Amazon (AMZN - Free Report) is firing on all cylinders to expand its footprint in the retail sector on the back of its strengthening grocery business and a growing physical presence.
The opening of Amazon Fresh grocery store is a testament to the company’s efforts to that end. Notably, the latest store, located at Woodland Hills neighborhood, Los Angeles, marks the first Amazon Fresh supermarket.
Further, the new store stocks meat, seafood, high-quality produce and a wide range of national brands at considerably low prices. Also, it offers a variety of delicious foods prepared fresh in store on a daily basis.
Additionally, the company introduced technically advanced methods, which are likely to make the shopping experience convenient, easy and fast. The launch of Amazon Dash Cart, which aids customers to shop and exit the store without standing in the checkout queue, remains noteworthy.
Also, Amazon’sEcho devices for offering voice shopping through Alexa, which will help customers navigate items across the aisles.
Along with in-store shopping, Amazon kept the option of online shopping at its new grocery store, which offers same day delivery as well as grocery pick-up service pertaining to customers’ orders.
Deepening Retail Focus
All the above-mentioned facilities offered by the Amazon Fresh grocery store are likely to deliver an enhanced shopping experience to customers, which it turn, is expected to drive the traffic at the store.
Moreover, Amazon’s latest move bodes well for its strengthening retail strategies, which include bolstering its online as well as offline retail presence, boosting distribution channels and accelerating delivery, which have been instilling investors’ confidence in the stock.
Notably, Amazon has returned 84.1% on a year-to-date basis, outperforming the industry’s rally of 67.6%.
Apart from Amazon Fresh grocery store, the company is planning to expand its Whole Foods stores network across the United States. Currently, it has more than 500 such stores.
Additionally, the growing base of Amazon Go, which is a cashier less store of the company, remains a major positive. Amazon currently has more than 20 such stores. The company intends to scale this number to touch a record tally of 3,000 stores by 2021.
Further, expanding the Amazon 4-star store, which stocks four-star or beyond rated products from the categories like kitchen appliances and other items, home stuff, toys, books, devices, consumer electronics and games, remains positive.
Moreover, expanding Amazon bookstores’ footprint is a tailwind.
Intensifying Retail Battle
Amazon’s aggressive stance on the core retail industry, especially grocery retail, continues to weigh on the brick-and-mortar stores as well as big retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) and The Kroger (KR - Free Report) to name a few.
We note that these retailers are leaving no stone unturned to counter Amazon’s competitive edge by ramping up their initiatives.
Nevertheless, Amazon’s rapidly expanding grocery pickup and delivery services, Prime Savings at all Whole Foods Stores and Whole Foods Market 365 stores across the United States besides other Prime benefits remain key catalysts.
Further, the company’s burgeoning offline retail chain is likely to sustain its momentum in this heightened battle.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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