Walmart, the leading grocers in the U.S., has further intensified its efforts to take on Amazon. The recent developments by the retail giant, starting with the takeover of Jet for US$3.3 bn in 2016 to last week’s acquisition of Bonobos, a menswear startup, for US$310 mn indicate towards the determination of the company to boost its e-commercial sales in order to challenge Amazon.
According to retail analysts at GlobalData, “Walmart is not going to suffer much from the recent drive of Amazon into the grocery segment, although the retail giant has the means and the motive. With a consumer base, which is less interested in buying groceries online, the comparatively small overlap with Whole Foods is unlikely to do any favor to Amazon. However, Target Corp. and Kroger are in the battle line, with the latter being much capable of defending itself than the former.” The grocery sales of Walmart accounts for more than 50% of its total revenues.
Amazon and Whole Foods to Benefit from Partnership
With a large pool of overlapping customers – 71.5% of the Whole Foods consumers also purchase from Amazon and 58.4% are using Amazon Prime – Amazon and Whole Foods stand to benefit from this partnership. In the meantime, the tech expertise of Amazon could address the pricing problems of Whole Foods, which the grocer is trying to resolve for a long time, stated the analysts at GlobalData. Whole Foods, on the other hand, could assist Amazon in materializing its grocery effort by exposing it to a large number of markets and providing a wide physical presence.