Amazon Won’t Obliterate the Grocery Store Industry

Amazon’s penchant to slash prices and stick it to its retail rivals will wreak havoc on the primary grocery store chains in America such as Kroger and Walmart. Or so says a stock market that has been trained to price in a slow death by Amazon (AMZN) at the mere whisper of the digital beast entering a particular segment.

Shares of Kroger and Walmart dropped 4.5% and 1.1%, respectively, on Friday on a report that Amazon was looking to open grocery stores throughout the country. The knee-jerk reaction of the market was not unlike when Amazon paid $13.4 billion to buy organic grocer Whole Foods in 2017. Nor was it too far removed from the hit some health care stocks received when Amazon bought mail order pharmacy PillPack in July 2018.

Investors instantly assumed the worst for U.S. grocery stores in the latest example of Amazon madness: thousands of physical Amazon grocery stores spanning every state by 2025 that would be selling $0.50 organic lemons to Prime members and $1 almond milk to those that rent five pieces of Amazon’s original content each month.

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