When Amazon (AMZN) bought Whole Foods, it was widely regarded as a move with some very real potential to it. Now, Whole Foods is getting a little bit of a facelift and planning to expand with a “minimarket” concept.
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Basically, Amazon is looking to rollout more Whole Foods locations, but in smaller overall footprints, hence the term “minimarket.” They are called “Daily Shop” stores, and tend to focus on simpler, regular-buy items like produce. They are particularly designed for “dense urban neighborhoods.” And although they are about a quarter of the size of a standard Whole Foods, they offer many of the same products and work to meet an important need.
The need in this case is called “fill-in shopping.” This involves customers who go to stores frequently, but only buy a few things when they get there. And it is a phenomenon on the rise, with consumers making 11% more trips to the grocery store year-over-year in October 2024 than they did in all of 2019. This opens up an opportunity to meet a market that only wants a few items per store visit.
Amazon’s Labor Troubles
Separately, while Amazon’s labor troubles are widely known and frequently discussed, a new report found a new wrinkle that’s prompting trouble in addressing Amazon’s issues. Just who does that delivery driver work for? Most of the time, it is not Amazon.
That Amazon often turns to subcontractors to serve as delivery drivers is not new. But it is an increasing problem for labor organizers who often find that Amazon delivery drivers do not actually work for Amazon. Yet despite this, Amazon holds an inordinate amount of power over these drivers and can basically fire them in a heartbeat since they are contractors.
Is Amazon a Good Long-Term Investment?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 45 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 47.47% rally in its share price over the past year, the average AMZN price target of $239 per share implies 11.94% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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