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Amazon (AMZN) to Expand Cashierless 'Go' Stores in Chicago

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It seems that Inc. (AMZN - Free Report) will surely meet its target of opening 3,000 Amazon Go stores by 2021.

The company is leaving no stone unturned to take on the grocery retail space. The company plans to expand its presence in Chicago by opening the third Amazon Go store at Ogilvie Transportation Center, located in 500 W. Madison St.

Though much detail has not been released yet, it is known that the convenience store will offer all kinds of grocery.

Markedly, the latest move of Amazon will expand its market share in this rapidly growing grocery space.

Growing proliferation of artificial technology (AI), machine learning (ML) and internet usage is likely to aid in the growth of these kinds of stores in this data-driven age.

Shares of Amazon have outperformed its industry on a year-to-date basis. The stock has registered a gain of 59.9% compared with the industry’s growth of 11.9% in the said period.



Amazon Go Expansion Continues

Amazon came up with the concept of cashierless store in the beginning of this year, by setting up its first store in Seattle.

Later, the e-commerce giant expanded Amazon Go to Chicago in September at 113 S. Franklin St. Its second Chicago Amazon Go store, which spans 1,200-square-foot, was recently opened. It is used to stock ready-to-eat food items like salads, sandwiches, wraps, as well as quick eatables and grocery items, along with Amazon meal kits.

The company intends to open a record of 3,000 cashierless Amazon Go stores by 2021. This is in sync with its strategy of aggressive expansion into the retail space. The company is planning to open 10 Amazon Go stores by the end of 2018 and aims to further increase the number to 50 by 2019.

With the expansion of its brick-and-mortar grocery stores, Amazon aims at making an average office goers’ life easier in today’s fast-paced world, by allowing them to grab whatever food item they want.

The company’s efforts to bolster its physical presence in the retail space are providing it with a competitive edge against the local stores. Notably, these local stores are already reeling under competitive pressure related to price and delivery, owing to Amazon’s online presence.

We believe that the company is well poised to rapidly penetrate into the U.S. grocery retail market, aided by the above-mentioned endeavors.

Strong Market Growth

Per a report from Statista, revenues in the U.S. food and beverages market are expected at a CAGR of 12.5% between 2018 and 2022, and to reach $25.98 billion by 2022. Further, revenues in this particular market are projected at $16.2 billion for 2018.

In addition, according to the latest report from Mordor Intelligence, the global retail industry is anticipated to record a CAGR of 5.3% between 2018 and 2023, and reach $31.9 trillion by 2023.

Amazon’s focus on expanding its physical presence, fast delivery services and improving product offerings will continue to strengthen the company’s market share in the highly growing retail market., Inc. Price and Consensus, Inc. Price and Consensus |, Inc. Quote

Zacks Rank & Stocks to Consider

Amazon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the technology sector are eXp World Holdings, Inc. (EXPI - Free Report) , ANGI Homeservices Inc. (ANGI - Free Report) and Internap Corporation (INAP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for eXp World Holdings, ANGI Homeservices and Internap is currently projected to be 10%, 25% and 2%, respectively.

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