iStock.com/Andrei Stanescu Amazon to Further Expand Its Physical Retail Presence?
Technology stocks took some serious losses in the recent market sell-off. Amazon.com, Inc. (NASDAQ:AMZN) happened to be one of them. After reaching $1.0 trillion in market capitalization in September 2018, AMZN stock started a downward journey, plunging more than 20% in just a few months.
But now, Amazon stock is making a comeback. And there’s a good reason for it.
Earlier this week, The Wall Street Journal reported that Amazon has plans to expand its Whole Foods stores across the U.S. (Source: “Amazon Plans to Add Whole Foods Stores,” The Wall Street Journal, December 31, 2018.)
Why is that good news?
Well, those that follow AMZN stock would know that the company acquired Whole Foods Market Inc. back in 2017 for around $13.5 billion. The acquisition of the premium grocery store chain created a bunch of new opportunities for the online retail giant.
For instance, “Amazon Prime” members can get discounts when shopping at Whole Foods stores. The company also offers “Prime Now,” a two-hour delivery service to Amazon Prime members in more than 60 cities. The service allows members to pick up groceries they ordered online at Whole Foods locations in as little as 30 minutes in nearly 30 cities.
Sources told The Wall Street Journal that “Whole Foods employees have visited potential retail spaces in parts of Idaho, southern Utah and Wyoming, where the grocer doesn’t have stores now.” (Source: Ibid.)
Furthermore, some of the retail locations they visited were around 45,000 square feet, making them bigger than the average Whole Foods store.
The implication here is quite clear. With more Whole Foods locations, Amazon’s Prime Now service would be appealing to a broader customer base. And a larger retail space per store would help Amazon