What does Amazon’s solid Q2 mean for Target and Walmart?

Amazon’s promising second quarter results have investors thinking Walmart and Target will follow suit, reports Reuters.

The delivery giant reported a 4.2% increase in ecommerce sales and a 6.4% bump in physical store sales in a Q2 that ended June 30. With Prime Day cranking out record sales numbers in mid-July, Amazon is forecasting as much as a 13% increase in third quarter sales. Walmart and Target will announce second quarter results next week, and both retailers have a cautious tone.

After talking about it for months, Amazon is starting to roll out a new grocery formula, offering fresh food delivery to non-Prime members, remodeling and reimagining stores, and testing highly computerized warehouses, among other advancements, reports Forbes. 

Amazon extended its Amazon Fresh grocery delivery services to non-Prime members in select U.S. cities last week, initially rolling out in 12 metro areas. The company has lowered prices for Prime members — an offer displayed on signage and embedded into the technology of its over 500-store supermarket chains. 

Amazon is also planning to combine its ecommerce supermarket brands (Amazon Fresh, Whole Foods, Amazon.com) into one single online cart. 

However, there are still signs of the grocery transition, or is it struggle? In late June Amazon announced hundreds of Amazon Fresh jobs would be cut. “Zone lead” roles, which are lower-level management positions which oversee specific store departments and handle employee training, were on the chopping block and part of the grocery reorganizing.

Related:With prices remaining high, former Walmart CEO predicts Target will struggle

Target is coming off a rough fiscal quarter where sales were up just slightly (.5% year-over-year) and profits were down 5.8%. However, grocery sales were increased in the single digits.

Walmart’s first quarter was more promising, as sales were up 7.8% year-over-year. The retailer upped its expectations for 2023, predicting a 3.5% growth in consolidated net sales.