Amazon (AMZN) to Boost Grocery Initiatives With New Plans

Amazon AMZN continues to ramp up its grocery game on the back of its robust strategies, strong infrastructure and expanding delivery network.

The company has been strengthening its presence in the grocery delivery market. It is now gearing up to expand its service, namely Amazon Fresh Marketplace, launched last year in the U.K. This testifies to the above-mentioned fact.

The company intends to roll out the service to the United States and the majority of locations in Europe next year.

Amazon provides Instacart like service to customers with the help of the underlined service. Currently, Prime members in the U.K. are eligible to order groceries from two major supermarket brands in the country using the Amazon app and availing of the same-day delivery service.

We note that the delivery of orders is being fulfilled by Amazon Flex drivers.

Move to Benefit

With the latest plans, Amazon is likely to give strong competition to Instacart, one of the strong players in the grocery delivery field in the United States.

The expansion of the Amazon Fresh Marketplace is expected to boost Amazon’s reach to grocery shoppers further.

It will help the e-commerce giant rapidly penetrate the grocery delivery market, which is growing owing to the increasing online grocery shopping throughout the world.

A report from Technavio shows that the global grocery delivery market is expected to grow by $631.8 billion between 2020 and 2024, witnessing a CAGR of 29%.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Growing Grocery Initiatives Globally

The latest plans of Amazon bode well with its deepening focus on the grocery segment.

Apart from Amazon Fresh Marketplace expansion, the company’s recent expansion of its Fresh infrastructure in India remains noteworthy. Notably, the new facility will help the company address increasing shopping of Fresh items, including groceries and essentials in the country. Moreover, it will help the company make quick deliveries of Fresh items, which are supposed to be delivered within two hours of shopping.

Further, the opening of the first Amazon Fresh store with the ‘just walk out’ technology in London remains a positive. The store stocks several grocery products from various brands. The company provides a cashier-less shopping experience to its customers via this store.

Furthermore, the introduction of the cashier-less technology in the new Amazon Fresh grocery store located at The Marketplace at Factoria in Bellevue, WA, is another notable step in the grocery retail space.

In addition to these, Amazon is geared up to introduce its cashier-less technology at two of its upcoming Whole Foods Market stores — one located in Washington, DC’s Glover Park neighborhood and one in Sherman Oaks, CA.

We believe that all these endeavors are expected to boost the company’s prospects in the promising grocery retail market.

However, Amazon is suffering from rising transportation and fulfillment center costs. Further, accelerating coronavirus-related expenses remain risky for the company’s margin expansion in the near term.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the retail-wholesale are Capri Holdings CPRI, Target TGT and Costco Wholesale COST. Capri Holdings currently sports a Zacks Rank #1(Strong Buy). Target and Costco carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Capri Holdings has gained 45.9% on a year-to-date basis. The long-term earnings growth rate for the CPRI stock is currently projected at 32.17%.

Target has gained 27.3% on a year-to-date basis. The long-term earnings growth rate for the TGT stock is currently projected at 14.4%.

Costco has gained 46.7% on a year-to-date basis. The long-term earnings growth rate for the COST stock is currently projected at 8.78%.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.