On Thursday, Amazon.com, Inc. AMZN 0.55% announced that it will officially complete its merger with Whole Foods Market, Inc.NASDAQWFM on Aug. 28. The e-commerce giant also revealed details of how the two companies will team up in the grocery space. Jefferies analyst Christopher Mandeville said there were no major surprises in the plan.
Amazon will begin lowering prices on select Whole Foods products starting next Monday with items such as organic avocados, organic brown eggs, organic salmon and organic rotisserie chicken. Additional price roll-backs will be happening in the months ahead.
Amazon Prime will now become Whole Foods rewards program and provide exclusive discounts to members. Whole Foods’ 365 private label products will now be available online via Amazon.com, and Amazon will be installing online pick-up and return lockers in Whole Foods stores as part of its omni-channel grocery strategy.
For traders looking for opportunity in the grocery space in the Amazon era, Mandeville says there will only be one true winner (see his track record here).
“The future unknown is what should continue to concern investors. In our view, the WFM/AMZN marriage will have major L-T ramifications for the entire grocery vertical (vendor/distributor/ retailer), forcing investment in price/quality and the experience (in-store and digitally), with the only true winner being the consumer,” he wrote.
According to Mandeville, the only good news for investors of rival grocery stores such as Kroger Co KR 1.46%, Target Corporation TGT 0.82% and Wal-Mart Stores Inc WMT 0.88% in the near term is that the stocks have already been punished for Amazon’s entry into the market. He sees…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
