Amazon making ‘simpler and less costly’ shift in grocery strategy, BofA says

BofA notes that Amazon outlined the next stage of its grocery strategy, which includes expanding perishable delivery & Whole Foods. The firm notes the Street has long questioned if Amazon would enter a major investment cycle to support its grocery ambitions, but it believes today’s announcement suggests Amazon is making a simpler – and less costly – shift in strategy. While Amazon will continue to test new store formats, BofA believes today’s announcement signals growing confidence in Amazon’s current strategy and opportunity for category growth. The firm has a Buy rating on Amazon with a price target of $286 on the shares.