Amazon Fails to Intimidate Jeff Yastine
Last year when Amazon announced it was buying Whole Foods, analysts and commentators in the retail space acted as though the sky were falling on every retail store in America not owned by Amazon.
Jeff Yastine, editor of Total Wealth Insider newsletter for Banyan Hill Publishing, points out that Amazon’s takeover of America’s entire retail business is not inevitable. Some major companies have the facilities to compete with it, and they would be even more effective if they joined forces. Whether that will happen or not, nobody knows for sure.
While buying organic health foods is a growing trend in the United States, the large majority of Americans still buy most of their groceries at mainstream supermarkets. Kroger is a major supermarket brand name with over 3,000 stores in the United States. And they have already begun experimenting with cashier-free technology. This should allow them to reduce labor costs so they can compete with Amazon on the prices of groceries. However, when Amazon’s buy-out of Whole Foods was announced, their stock price went down 35%. In Yastine’s opinion, this exaggerates the threat Amazon poses to Kroger.
I took plenty of heat back in June when I said the Amazon-Whole Foods merger “would be a surprising setback for the internet giant.”
— Jeff Yastine (@Jeff_Y_Guru) December 12, 2017
eBay is another potential competitor or partner that can compete with Amazon. That’s because they have a large number of their own fulfillment centers around the United States. Jeff Yastine believes this could make eBay an attractive partner for Google. They could combine Google’s technical expertise with eBay’s physical distribution assets to compete with Amazon in online and offline retail.
Another possibility is Grainger. It seems unlikely because it sells industrial supplies. Even so, its stock went down on investor fears that Amazon would dominate all retail markets. However, like eBay, it owns a large number of warehouses and distribution centers around the country. That should make it a prime partner or takeover target for any company seeking to compete with Amazon. Amazon is able to deliver goods as quickly as it does only because of the warehouses in owns in various parts of the United States.
Jeff Yastine began working for Banyan Hill as an editorial director in 2015 after over two decades working as a financial journalist. He spent many years as a Senior Correspondent for PBS Nightly Business Report, where he was once nominated for a Business Emmy Award for a story covering how America’s infrastructure of roads and bridges was underfunded. He also worked for the Oxford Club and Newsmax Media.
In Total Wealth Insider Yastine writes about value stocks that will soon go much higher in price.