E-commerce giant Amazon (AMZN) is making its same-day fresh food delivery available in more than 1,000 U.S. cities and towns, with plans to expand this to at least 2,300 locations by the end of the year. The idea is to get shoppers to add items like meat, eggs, and fresh produce while browsing its site. Amazon tested the service in select cities last year and found that many first-time grocery customers started shopping twice as often after using same-day delivery for fresh foods.
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Prime members in most cities can use the service for free on orders over $25, while smaller orders cost $2.99. Non-Prime customers can still access the service, but it costs $12.99 per order regardless of size. Unsurprisingly, the news rattled the grocery market, with shares of Instacart (CART), Kroger (KR), Albertsons (ACI), and Walmart (WMT) all falling following the announcement.
It is worth noting that over the past few years, Amazon has been changing its grocery strategy by making changes to its Fresh grocery store chain and opening fresh food delivery to non-Prime members. It has also worked to boost sales of household staples while integrating its 2017 acquisition of Whole Foods Market more closely into its grocery operations. Indeed, in January, Whole Foods CEO Jason Buechel took charge of Amazon’s worldwide grocery stores, and by June, he announced plans to bring Whole Foods under the Amazon umbrella as part of a wider reorganization.
What Is the Price Target for AMZN Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Amazon stock based on 43 Buys and one Hold assigned in the past three months. Furthermore, the average AMZN stock price target of $264.57 per share implies 19.6% upside potential from current levels.
