Amazon is poised to boost brick-and-mortar presence
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Amazon (AMZN) CEO Andy Jassy plans to double down on the company's struggling grocery store business. The retail behemoth is ready to "go big" on physical stores in 2023, he told the FT, blaming the COVID-19 pandemic for ongoing struggles.
The company has yet to disrupt the grocery sector since scooping up Whole Foods for $13.7B in 2017. Since the acquisition, Amazon's (AMZN) revenue from its physical store unit has grown only 10%, while brick-and-mortar store sales make up a marginal 3.4% of the company's total business.
Meanwhile, Amazon Fresh grocery stores and Amazon Go convenience stores have only gained limited traction, and the company recently decided to "exit certain shops with low growth potential." Both formats include "Just Walk Out" technology that provides a cashier-less experience with an array of cameras, but these too have given little aid to financial figures.
Pulling back its expansion plans on grocery led to a $720M impairment in Amazon's (AMZN) Q4 2022 results. Also check out recent SA contributor commentary, like Ironside Research's Looking Ahead: Why Amazon Must Execute Flawlessly In 2023.