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Amazon needs to ‘make a call on physical grocery’: Analyst

In an open letter to Amazon’s CEO, an analyst said the company is pursuing “too many ideas” and needs to focus

Chloe Riley, Executive Editor

June 8, 2023

1 Min Read
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Amazon is a dominant force in online retail, but the company has become too unfocused and is missing out on opportunities in its core businesses, according to Bernstein analysts, who on Wednesday published an “open letter” to CEO Andy Jassy and the board, reports CNBC.

The online retailer remains a leader in ecommerce and cloud computing with Amazon Web Services. But in some other areas, including grocery, the company has invested heavily without reaping the results, the analysts said.

“We fully support Amazon’s efforts to uncover and capture the next AWS-sized opportunity,” wrote Bernstein’s Mark Shmulik. “But what we’ve seen recently is a company simply pursuing too many ideas, with weaker ideas taking away the oxygen, capital, and most importantly focus from the truly disruptive initiatives that ‘only Amazon can do.’”

When it comes to Whole Foods, Amazon Fresh, and Amazon Go, Amazon needs to “make a call on physical grocery,” Shmulik wrote. 

Amazon bought Whole Foods for $13.7 billion in 2017. Recently, the company paused further expansion of its Fresh and Go stores as Jassy re-evaluates the concept’s economics.

Instead of continuing to “tinker with” Fresh and Go, Shmulik advised that Amazon should “purchase a proven concept such as potential divested KR/ACI stores,” referring to the stores Kroger and Albertsons may sell off as part of their potential merger.

Related:Amazon Prime vs. Walmart+ in race for grocery

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About the Author

Chloe Riley

Executive Editor, Supermarket News

Chloe Riley is the Executive Editor of Supermarket News, which delivers the ultimate in competitive business intelligence, news and information for executives in the food retail and grocery industry. A graduate of the School of Journalism at Columbia College Chicago, Chloe previously served as a Digital Strategist at SEO firm Profound Strategy, Associate Editor at B2B hospitality mag HOTELS Magazine, as well as CEO of her own digital strategy company, Chlowe. She lives in Woodstock, Illinois. 

Email her at [email protected], or reach out on LinkedIn and say hi. 

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