【cost of inground pool san antonio】Amazon Will Take the Next Step of Its Whole Foods Strategy in 2019
Soon after
Amazon
(NASDAQ: AMZN)
acquired Whole Foods Market in 2017,cost of inground pool san antonio it started offering discounts to Amazon Prime members and selling Amazon devices in stores. In 2018, Amazon introduced free grocery delivery for Prime members at select locations and enabled online shoppers to pick up orders at their nearby Whole Foods location.
2019 might be the year Amazon starts building new Whole Foods locations. The company is planning stores in more suburban locations in the Rocky Mountain region, according to a report from the
Wall Street Journal
. The stores will also be bigger than the average Whole Foods location, providing additional space for Amazon to store additional products and offer online order pickup services. That's a key synergy provided by the Amazon acquisition that could enable Whole Foods to expand to more locations.
A woman pushing a shopping cart in front of a Whole Foods Market sign.
Image source: Whole Foods Market.
All about Prime Now
Amazon has over 100 million Prime members around the world, but
member growth
has stagnated in the United States. Amazon continues to invest in benefits for its Prime members, including those offered at Whole Foods. That's enabled it to raise the price of Prime to $119 per year, which still presents great value to customers.
One benefit Amazon is working to expand is Prime Now, its two-hour delivery service for select items. It's currently available in about 60 cities.
Building out new Whole Foods locations that can double as distribution centers for Prime Now deliveries can make the expansion of Whole Foods much more economical. While Whole Foods might have been challenged to create profitable stores in more suburban locations on its own, Amazon can utilize the space to boost online sales from its marketplace as well.
Whole Foods' expansion has slowed since 2014 when it added a record 38 stores. In it 2016 annual report, management wrote, "We believe it is prudent in this challenging food retailing environment to lower our year-over-year square footage growth."
Amazon also brings a willingness to invest in less profitable areas that Whole Foods didn't have as a stand-alone company. Amazon can invest in those areas because it can gain benefits from scale and has proven capable of maximizing the value of its infrastructure (see Amazon Web Services, Fulfillment by Amazon, Prime Video, et cetera).
Bringing the competition
Whole Foods currently accounts for just 3% of the U.S. grocery market. Its footprint is relatively small compared to grocery giants like
Walmart
(NYSE: WMT)
and
Kroger
(NYSE: KR)
. Walmart has over 4,800 locations selling groceries in the U.S. Kroger has over 2,700 grocery locations. Amazon has just 450 Whole Foods locations in the U.S.
Expanding into territories with fewer grocery options presents a major opportunity for Amazon and Whole Foods. Amazon is willing to take slim profits (or even losses) in order to take market share from its competition.
Instead of trying to compete on price with Whole Foods, however, Amazon will compete on service, offering online order pick-up and delivery for customers, putting
pressure
on Walmart and Kroger to continue expanding those services. Kroger is already struggling to keep up with the pressure it currently sees from Whole Foods and the rest of the industry while Walmart has made considerable price investments negatively impacting profits.
Amazon's strategy to expand Prime services by combining new Whole Foods stores with small distribution centers gives it a huge advantage over the competition when it comes to buying up real estate and opening new stores. The competition will be hard-pressed to replicate those economics, and it could show up in their profit margins as Amazon expands.
More From The Motley Fool
10 Best Stocks to Buy Today
3 Stocks That Are Absurdly Cheap Right Now
5 Warren Buffett Principles to Remember in a Volatile Stock Market
The $16,728 Social Security Bonus You Cannot Afford to Miss
The Must-Read Trump Quote on Social Security
10 Reasons Why I'm Selling All of My Apple Stock
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
Adam Levy
owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a
disclosure policy
.
View comments
(责任编辑:Fashion)
- Violet Defense Awarded DIU Subcontract for Prototype of Ruggedized UV Disinfection Product
- Nordstrom heir Blake Nordstrom dies at 58
- Travis Scott's 28th Birthday Party Had Kylie Jenner Getting a Tattoo, a Slushie Machine, and a Foggy Gas Station
- Wiseway Group Limited (ASX:WWG) Is Employing Capital Very Effectively
- Looking for a Growth Stock? 3 Reasons Why Lumentum (LITE) is a Solid Choice
- Space Launch Services Market to Reach USD 26.16 Billion by 2027; Increasing Space Research Activities will Emerge in Favor of Market Growth, says Fortune Business Insights™
- Have Insiders Been Buying Adslot Limited (ASX:ADJ) Shares This Year?
- Spirit Aerosystems: 4Q Earnings Snapshot
- This KitchenAid Mixer Bundle Is Only $240 Right Now — the Cheapest It’s Ever Been on Amazon
- CMA CGM Donates 200,000 Face Masks
- Shire plc : Rule 2.9 Announcement
- Meghan Trainor’s TMI Comments on Daryl Sabara Marriage: From ‘Gross’ Toilet Moments to ‘Painful’ Sex
- Can We See Significant Institutional Ownership On The Ceconomy AG (FRA:CEC) Share Register?
-
Investors who take an interest inDomino's Pizza Group plc(LON:DOM) should definitely note that the C ...[详细]
-
China's c.bank relaxes conditions for financing of small enterprises
HONG KONG, Jan 2 (Reuters) - China's central bank said on Wednesday it will relax its assessment cri ...[详细] -
As Trump and Congressional Leaders Meet, Here's What the Shutdown Means for You
Going into day 12 of the partial government shutdown, the face-off between Democrats and President T ...[详细] -
Bitcoin Price Analysis: Keep an Eye Out for a Close Above the Current High
Bitcoin Price AnalysisShortly after falling from its test of the low $4,000s, bitcoin managed to fin ...[详细] -
Investors who take an interest inViad Corp(NYSE:VVI) should definitely note that the CEO, President ...[详细]
-
Colony Bankcorp, Inc. (NASDAQ:CBAN) Insiders Increased Their Holdings
We often see insiders buying up shares in companies that perform well over the long term. The flip s ...[详细] -
BRIEF-FGV Holdings Appoints Mohd Hairul Bin Abdul Hamid As CFO
Jan 2 (Reuters) - FGV Holdings Bhd:* MOHD HAIRUL BIN ABDUL HAMID APPOINTED CFO Source text :http://b ...[详细] -
India ruling party confident of doing well in general election-Modi
(Repeats to add missing dateline)By Swati BhatMUMBAI, Jan 1 (Reuters) - India's ruling Bharatiya Jan ...[详细] -
Are You Looking for a Top Momentum Pick? Why Vapotherm (VAPO) is a Great Choice
Momentum investing is all about the idea of following a stock's recent trend, which can be in either ...[详细] -
Actavis represents good takeover alternative for Pfizer, says Leerink
Leerink believes Actavis (ACT), post its buyout of Forest Labs, represents a good takeover alternati ...[详细]
Survey Results: Investors Have No Idea Where The Market Is Headed Next
Is the Dollar in for a Surprise? Nonfarm Payrolls and Wage Growth in Focus
- iRhythm Technologies, Inc. Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?
- New Guru Philippe Laffont's Top 5 Holdings
- Not just arabesques: Misty Copeland imparts her life lessons
- Does TechTarget, Inc.’s (NASDAQ:TTGT) CEO Salary Compare Well With Others?
- How Does Duluth Holdings's (NASDAQ:DLTH) P/E Compare To Its Industry, After The Share Price Drop?
- 12 Financial Mistakes Your Company Is Probably Making
- FOREX-Yen gains as new year trade starts on cautious note