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Amazon Launches Digital Grocery Catalogue, Enriches Shopping

Zacks Equity Research

Amazon AMZN continues to disrupt the grocery market on the back of its strengthening initiatives focused on Whole Foods.

Recently, Whole Foods Market introduced a digital catalogue that lists several products from the store under different segments like produce, dairy, snacks, seafood and prepared foods, to name a few.

Moreover, the products are listed under dietary preference categories namely — Whole Foods Diet-approved, Engine 2, vegetarian, vegan, gluten-free, paleo-friendly, keto-friendly, sugar-conscious, dairy-free, kosher, organic, low-sodium and low-fat.

This will aid the customers in finding products as per their dietary requirements quickly and easily from the catalogue which is likely to enhance shopping experience.

Further, the catalogue will also contain information regarding price, availability, nutrition and ingredients of a every individual product.

Benefits of the Move

All the above-mentioned customer benefits will help the company in attracting customers to its store.

Further, the shoppers will also be able to view Prime deals with deep discounts at the store. This is likely to encourage Prime subscription.

We believe the benefits are likely to accelerate the company’s offline as well as online grocery sales, consequently drive top-line growth.

This in turn will help Amazon to bolster footprint in the U.S. grocery retail market which as per a report from report from IGD, is expected to reach $1.7 trillion by 2022 at a CAGR of 3.6% between 2017 and 2022.

Amazon.com, Inc. Revenue (TTM)


Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Deepening Retail Focus

Amazon’s aggressive retail strategy and distribution strength will continue to benefit it in gaining traction in the retail space.

The latest initiative will boost the product knowledge of the customers and also will aid them in making right buy choice. This is likely to aid the company in expanding customer base.

Apart from this, Amazon is planning to set up additional Whole Foods stores across more U.S. cities and suburbs in a bid to facilitate its fast delivery services to more grocery shoppers. This remains a tailwind.

Further, strengthening grocery pickup and delivery services along with availability of Prime Savings at all Whole Foods Stores and Whole Foods Market 365 stores nationwide remain key catalysts.

Additionally, growing footprint of Amazon Go store and its cashierless facility are improving the company’s grocery market position.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector that can be considered are TripAdvisor TRIP, Wayfair W and Groupon GRPN. While TripAdvisor sports a Zacks Rank #1 (Strong Buy), Wayfair and Groupon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term EPS growth rate of TripAdvisor, Wayfair and Groupon is currently pegged at 14.05%, 18% and 3%, respectively.

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