Amazon vs. Walmart: Grocery Wars
![walmart](https://a57.foxnews.com/static.foxbusiness.com/foxbusiness.com/content/uploads/2017/12/931/506/split.jpg?ve=1&tl=1)
Amazon lowered the boom on Walmart (NYSE: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 (NYSE:WFM) for $13.7 billion.
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 (NYSE: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.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
KR | THE KROGER CO. | 54.27 | +0.96 | +1.80% |
COST | COSTCO WHOLESALE CORP. | 817.60 | +2.81 | +0.34% |
WMT | WALMART INC. | 69.79 | -0.24 | -0.34% |
TGT | TARGET CORP. | 149.00 | +2.71 | +1.85% |
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.
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.
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.