Amazon has the resources, and potential drive to buy hundreds of grocery stores that Kroger and Albertsons are slated to divest, according to analysts at Bernstein research firm, reports Business Insider.
In a shareholder letter from earlier this month, Amazon CEO Andy Jassy explained the company has struggled in the retail sector, leading it to shut down Amazon Go and Amazon Fresh locations. Since then, it has also laid off many corporate employees at Whole Foods.
But Jassy said the company is looking to go bigger in the industry.
"To have a larger impact on physical grocery, we must find a mass grocery format that we believe is worth expanding broadly," he said, adding that the company needs "a broader physical store footprint given that most of the grocery shopping still happens in physical venues."
Bernstein analysts recently compiled a model for the company to grow by seeking acquisitions. In a note published this week, the firm said that Amazon could buy as many as 500 divested stores resulting from the planned Kroger and Albertsons merger.
"In theory, Amazon could plug acquired stores into its network, which would (potentially at least) prove less painful and costly than building a distribution and logistics network from scratch," analysts wrote. They also shared that store locations are concentrated in areas that the online retail giant would find attractive.
The analysts warned that the scenario is hypothetical, but likely a sound business move. Full Story
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