No Checkouts, Automated Warehouses and One Online Shopping Destination: The Future of Amazon’s Grocery Business
Key takeaways
- Amazon is overhauling its online grocery business to include everyone — not just Prime members
- Whole Foods, Amazon Fresh and Amazon.com items will soon fall into one cart rather than three
- Rebranding stores, cashier-less tech and automated warehouses also planned
Amazon is apparently relaunching its online grocery business, having already invested billions in buying household-name grocery brands and building out Amazon Fresh. With some promising new technological developments and a new strategy to revitalize the offering, it could be a boon for the share price. Here’s what we know so far.
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What’s the latest with Amazon’s grocery business?
We always knew Amazon was looking to compete with the likes of Walmart and Krogers when it acquired Whole Foods for $13.7 billion. Now, Amazon wants to roll out an entirely revamped online grocery shopping experience nationwide.
Previously, only Prime members could take advantage of Amazon’s grocery shopping offering, but the shopping titan plans to roll out grocery shopping in Boston, Dallas and San Francisco to everyone.
The plan is also to bring the Whole Foods brand, Amazon Fresh and Amazon.com all under one umbrella to simplify the shopping experience for customers, who currently have to check out three different carts.
Amazon will also revamp its existing locations with new Amazon Fresh branding and the latest technology, such as the Just Walk Out cashier-less feature first used in Amazon’s Go stores. As for the nuts and bolts, the e-commerce giant is also testing a fully automated warehouse in Long Island.
Amazon’s market performance in 2023
The grocery business hasn’t exactly been a winner for Amazon so far — last year, the company shut down over 60 brick-and-mortar stores, and Amazon’s last financial year held a $720 million write-down primarily due to its grocery division.
The U.S. grocery market is worth roughly $1.5 trillion, so Amazon is looking to add even more value to its share price. It’s already been a standout year for the stock, with Amazon shares climbing nearly 50% in 2023.
As for its competitors in the grocery business, Walmart has seen a 10.8% lift to its share price this year, while Kroger has seen a 10.2% climb.
The bottom line
We’re seeing Amazon make big moves into new markets lately, including healthcare and the nascent satellite internet sector. It’s no wonder the conglomerate wants to capitalize on its substantial investment in the groceries business — and the changes it’s lined up sound pretty exciting.
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