Amazon vs. Walmart: Grocery Wars

By Ecommerce FOXBusiness

Amazon lowered the boom on Walmart (WMT). As the discount retailer announced plans to acquire Bonobos Friday—a men’s clothing company for $310 million, Amazon said it plans to buy Whole Foods (WFM) for $13.7 billion.

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Walmart shares finished the session 3% lower, a sign investors are betting Amazon’s e-commerce strategy will continue to dominate the industry, its shares jumped over 2%.

Amazon’s bet on the organic grocer will help the company better compete against Walmart—which is currently the leading grocer —beating out competitors like Safeway and Kroger (KR)—according to a 2015 Consumer Report that says the retailer captures about 25% of the grocery market in the U.S., up from around 7% in 2002.

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On Thursday, Kroger shares had the biggest percentage drop, 24.6%, since 1999. The chain posted its second-straight quarter of same-store sales declines and lowered its 2017 guidance.
Additionally, both Walmart and Amazon are experimenting with drive-up grocery stores models.

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In May, Amazon opened up two test locations in Seattle, which will allow Amazon Prime subscribers to place a grocery order online and then pick-up at a drive through window.

Walmart announced similar plans last week with a plan to test an automated grocery kiosk at a store location in Oklahoma City. The concept will allow customers to order groceries thru their app and pickup it up at a location using a special code.

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As Amazon targets Walmart’s grocery arm, Walmart has been doing the same by ramping up its overall e-commerce push. Along with today’s deal, it recently acquired apparel retailers Moosejaw and Modcloth. Last August, it paid $3 billion for consumer products retailer Jet.com.
 

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