Remember Borders? What about Circuit City, Tower Records, or Musicland? Those stores were all big chains back in 1995, when Amazon debuted. But now they’re all gone, due in part to the online retailer upending the American retail landscape.
Jeff Bezos’ company has been blamed for killing off once-stalwart retail chains. To hear some tell it, the path to total Amazon domination is just beginning. One investment firm even has a “Death by Amazon” index to track the stock prices of 54 retail chains they believe are most threatened by the online retailer.
Of course, Amazon isn’t solely responsible for killing struggling stores. Bad leadership and strategic mistakes have crippled companies like Sears and JCPenney just as much, according to some. But when Amazon gets a category in its crosshairs, companies in the space need to brace for impact. If the following businesses can’t find a solution fast, they may be destroyed by Amazon. Many shoppers would miss one popular wholesale retailer (page 9).
1. Grocery stores
Amazon may only control 1% of the grocery business in the U.S., but it’s poised to take a much bigger piece of the pie, threatening both small and large supermarket chains with its recent purchase of Whole Foods. That has traditional supermarkets very worried. Amazon is entering the highly competitive U.S. grocery market just as a war is heating up between stalwarts, such as Kroger and Safeway, and expanding chains, such as Aldi and Lidl.
Kroger’s stock took a big hit after Amazon announced it was buying Whole Foods, as did shares of Sprouts Farmers Market and Supervalu. The grocery battle could mean lower prices for U.S. consumers — at least in the near future — as well as a big shift in how we all shop for food, noted Quartz. Yet research suggests many people are resistant to the idea of shopping for groceries, especially perishables, online, so there might be hope for traditional supermarkets.
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