Rumors have been flying for some time that Amazon is poised to enter the pharmacy business. It looks like CVS is fighting back by getting ahead of Amazon, offering next day delivery for drugs. The plan is to have nationwide coverage by early next year. By December 4 of this year, CVS says it will even offer same-day delivery of drugs in Manhattan. Sharon Terlep reports: The same-day service in Manhattan will be handled by couriers, and roughly 50 nonprescription goods will also be eligible for delivery as well. As the pharmacy industry shifts, CVS revenues have declined in its retail … [Read more...]
Amazon No Longer Content With its Narrow Margins, Aims Lower
After years of selling its goods at razor thin margins, or losses, Amazon is now discounting goods third party sellers offer on the e-commerce website. Amazon is making the move to ensure competitive pricing for goods against competitors like Wal-Mart and Dollar General. Laura Stevens reports: Until now, Amazon has generally controlled prices only on merchandise it sells directly to consumers. Now, it is discounting some items sold by third parties, covering the cost difference itself to ensure competitive pricing. The new “Discount provided by Amazon” tag allows Amazon to compete more … [Read more...]
Will J.C. Penney Be the Next Legendary Retailer to Fall?
Shares of J.C. Penney are plunging as investors have gotten scared about the company's profit potential. The company's CEO, Marvin Ellison tried to reassure shareholders by explaining inventory decisions to them, but it didn't seem to have much of an effect. Is it possible J.C. Penney will be the next storied retailer to go by the wayside? Cara Lombardo reports: Penney’s profit was also hurt by increased sales of appliances, which carry lower margins than the apparel and other goods it sells. Penney said that despite the near-term profit shortfall, its inventory decision was right for the … [Read more...]
Wal-Mart to Open Fewest U.S. Stores in 25 Years
Rather than opening as many stores as normal, this year Wal-Mart is limiting its store openings to about 24. Rather than spend big money on more new locations, Wal-Mart will focus its spending on increasing its internet sales, and developing its service businesses, like grocery delivery. Sarah Nassauer and Austen Hufford report: The strategy is central to Wal-Mart’s plan to fend off Amazon.com Inc. and a sign that executives believe the profitable business based on cavernous stores that Wal-Mart built rapidly for decades won’t grow through expansion. At an investor meeting on Tuesday at … [Read more...]
Is Kroger About to Dump its High-Margin C-Stores?
Kroger appears to be poised to sell its convenience store chains in order to put more focus on its grocery business. The C-stores are a high margin part of Kroger's sales, but Kroger indicates it wants to put more emphasis on online sales. Heather Haddon reports: Selling the convenience stores could deprive Kroger of one means for reaching its goal to capture more of the roughly $1.5 trillion spent in the U.S. each year on food and consumables. The stores generated $4 billion in revenue last year and have delivered more than five years of identical store sales growth. Convenience stores … [Read more...]
Are Warehouses the New Thing in Real Estate Investing?
Duke Realty Corp., a REIT that has a history of investing in offices and medical properties, is buying logistics facilities (warehouses) from Bridge Development Partners. The purchase solidifies a move to logistics properties that Duke began years ago. The strategy stems from the explosion of the online retail business. Peter Grant reports: Indianapolis-based Duke is buying the properties from Chicago-based Bridge Development Partners LLC in two stages. The first includes a 10-building portfolio with 3.4 million square feet in Southern California, northern New Jersey and South … [Read more...]
Where Will Amazon’s HQ2 Land?
Cities are going all out to attract Amazon's new second headquarters. The HQ2 as it is being called is attracting bids from cities around the country. The city council of Stonecrest, Georgia (just outside Atlanta) has even voted to de-annex a portion of its land to give to Amazon as a new "Amazon City" should the e-commerce company locate there. Mark Niesse of the Atlanta Journal-Constitution writes: The city’s resolution asks the Georgia General Assembly to form the city of Amazon on that land, located off Lithonia Industrial Boulevard and Coffee Road in DeKalb County. “There are several … [Read more...]
Would You Allow Wal-Mart to Stock Your Fridge?
A number of services have been created to get groceries to your home. Some are simply the same bagged groceries you would buy yourself at a grocery store. Some are prepared foods or a box of ingredients for foods you'll cook. But none of these sources puts the food right into your refrigerator, until now. Wal-Mart is working with August Home, a smart lock company, to enable food delivery people to access your home and put your groceries right in your fridge without you even having to be there. Matthew Stern explains the service at Forbes: Walmart has made many big investments in innovation in … [Read more...]
This is your Cue to Start looking at Retail Stocks
Retail is a competitive business. The barriers to entry tend to be low and far too many publicly traded firms have businesses that aren't durable enough for conservative long-term investment. Amazon has put the wood to many of these firms. The WSJ reports in the article below that the "Amazon Effect," (not to be confused with "Bezos Law") has led to a souring on global retail stocks. Amazon is a darling of the financial press and in many Wall Street brokerage houses. Amazon has had a real impact on brick and mortar retailers, but the most pronounced effect has been in the stock market. As … [Read more...]
German Grocers Lead Blitzkrieg on American Soil
Aldi and Lidl, two German discount grocery businesses are invading the U.S. with competitive prices. The stores don't offer too many products, but what they do offer is priced at rock bottom. NPR details how the German stores are expanding in America: Competition has been intense among U.S. grocers. Companies are trying to figure out the role of technology in our shopping habits, and Amazon is ever the elephant in the room, now in possession of Whole Foods. And the pressure to compete on price is always there. In fact, prices have been falling quite a bit. Analysts often cite two major … [Read more...]
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