Amazon (AMZN) Expands Grocery Business With New Jersey Store
Amazon AMZN is leaving no stone unturned to expand its grocery retail footprint in the United States on the back of brick-and-mortar concept.
In this regard, the company recently inaugurated its second Amazon Fresh store in New Jersey.
The new 35,500-square-foot store offers prepared foods, international condiments and grocery items from more than 75 local brands and Amazon private brands.
Customers who visit this store can also use Amazon Dash smart carts, palm-scanning Amazon One technology and Alexa kiosks, making grocery shopping more convenient for shoppers.
The latest move not only strengthens Amazon Fresh business but also boosts the company’s physical retail footprint.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Growing Focus in Grocery Business
In addition to opening a new store in New Jersey, Amazon is set to open another Amazon Fresh store in Virginia.
The company is also set to launch a smaller Whole Foods Market concept in Manhattan called Whole Foods Market Daily Shop. These quick-shop stores, ranging from 7,000 to 14,000 square feet, will offer grab-and-go meals, snacks, weekly essentials, seasonal produce, prepared foods, bread, alcohol, supplements and local specialties.
Moreover, the company’s smart shopping cart, called Amazon Dash Cart, powered by advanced computer vision technology, is a plus. It provides personalized shopping experiences with an on-cart screen featuring maps and navigation and helps customers skip checkout lines. Dash Cart also tracks customers' savings and spending in real-time, making it a preferred choice for customers.
This Zacks Rank #3 (Hold) company also launched a Prime grocery benefit, offering $9.99 monthly delivery for orders under $40 from Whole Foods or Amazon Fresh. This offering is expected to help customers satisfy their grocery needs and potentially change how people split their orders over time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Advantage
The growing grocery retail efforts will help Amazon fend off competitors like Walmart WMT, Costco COST and Target TGT, which are making concerted efforts to expand their grocery business.
Walmart is replacing price stickers with electronic shelf labels in grocery stores, allowing employees to update prices every ten seconds. The labels also feature product descriptions with barcodes that can provide additional information, such as product sourcing, gluten-free status, or keto-friendly options, using mobile devices.
Meanwhile, Costco’s growing strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth have been the key factors in driving its grocery business.
Target, on the other hand, plans to bolster its grocery business further with the introduction of its generative AI technology, Store Companion. The chatbot tool, currently in pilot testing at 400 locations, will answer process and procedure-related questions of store employees.
Conclusion
Amazon’s shares have gained 20.3% in the year-to-date period, outperforming the Zacks Retail-Wholesale sector’s growth of 15.1%. The company is benefiting from its strengthening grocery business, solid Prime momentum, strong adoption rate of AWS, deepening focus on generative AI and its robust smart home security devices portfolio. It is also gaining from a strong global presence, solid momentum among small and medium businesses and growing capabilities in pharmacy, healthcare and autonomous driving.
These factors are expected to continue driving the overall financial performance of the company in the near term.
The Zacks Consensus Estimate for 2024 revenues is pegged at $638.24 billion, indicating year-over-year growth of 11.04%.
The consensus mark for 2024 earnings is pegged at $4.58 per share, indicating a 57.9% rise from the year-ago figure. The figure has been revised upward by 11.7% in the past 60 days.
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