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More speculation on AmazonFresh moving into New York City

  • Speculation on a plan by Amazon (AMZN) to bring AmazonFresh to the New York City area increases with a report a development partner of the company purchased a 964K square foot facility across the Hudson River in New Jersey.
  • Also, AllThingsD notes the company has also posted help wanted advertisements for a New Jersey facility.
  • If Amazon does bring grocery delivery to the Big Apple, it will run up against competition from PeaPod and FreshDirect.
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Comments (7)
  • Gary J
    , contributor
    Comments (4783) | Send Message
     
    "If Amazon does bring grocery delivery to the Big Apple, it will run up against competition from PeaPod and FreshDirect."

     

    More like the other way around.
    14 Aug 2013, 08:09 AM Reply Like
  • morrisdev
    , contributor
    Comments (30) | Send Message
     
    That's a very small market and those businesses run at a very tight margin.

     

    I remember when BlockBuster video came to our town, they were new and fancy, they undercut all the local shops, taking a loss. Once all the locals went under, BB more than doubled their rates, but it was too late for the locals.

     

    My guess is that Amazon will cut into the market share of PeaPod and FreshDirect enough to cause them to collapse, forcing their market to all move to Amazon.

     

    Still.... I don't see a massive profit in it. People are fickle and a beginner web developer could put a local grocery store on the web with a $150/month shared server. (although that server might be an Amazon EC2 server!)
    14 Aug 2013, 10:06 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1211) | Send Message
     
    morris: do you think $150/month will cover delivery trucks, warehouses ( or do you think they can just deliver from existing stores in Manhattan ?), and delivery drivers ?

     

    In wealthier parts of Manhattan, a Whole Foods is also just few blocks away. Not to mention local high end grocers, Trader Joes, and more normal mid tier markets.

     

    The market is super competitive and anyone that thinks AMZN will get high margins is just delusional.
    15 Aug 2013, 11:05 AM Reply Like
  • pkenglish1994
    , contributor
    Comments (8) | Send Message
     
    More cash outlay in competitive markets, questionable future profitability. Think grocers will just lay down and let AMZN take over? Casting a wide net and hoping things stick is no business strategy - art marketplace? Look at Macy's for consumer sentiment, revenue growth expectations here are way too rosy. Better tech global growth plays out there at better valuations - NCR.
    14 Aug 2013, 10:14 AM Reply Like
  • bil4Bill
    , contributor
    Comments (21) | Send Message
     
    what is a reasonable multiple for a grocer?
    14 Aug 2013, 10:28 AM Reply Like
  • Michael428
    , contributor
    Comments (766) | Send Message
     
    What was the multiple for milkmen in the 50s?
    14 Aug 2013, 04:12 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1211) | Send Message
     
    Michael .. it shouldve been really high if market was efficient. After putting the rest out of business, the leading one would have had decades of high margin profits to offset all those years of profitless expansion.
    15 Aug 2013, 10:59 AM Reply Like
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