|Bid||0.00 x 1100|
|Ask||0.00 x 900|
|Day's Range||1,730.46 - 1,746.80|
|52 Week Range||1,307.00 - 2,035.80|
|Beta (3Y Monthly)||1.57|
|PE Ratio (TTM)||76.87|
|Earnings Date||Jan. 29, 2020 - Feb. 3, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||2,183.86|
Analysts say the issues at the one-time retail mecca run deep.
(Bloomberg) -- The founder of China food-delivery giant Meituan Dianping is having a very good year.As his business has grown, Chief Executive Officer Wang Xing’s net worth doubled this year through Thursday’s close to $6.7 billion, according to Bloomberg Billionaires Index. That figure is likely to top $7 billion as Meituan’s stock surged Friday, following a strong earnings report.Shares climbed as much as 13%, the most intraday since its IPO last year, and traded 8% higher at 11:45 a.m. Meituan reported quarterly revenue that increased 44% to 27.5 billion yuan ($3.9 billion) in the three months ended September, compared with the 26 billion yuan average of analysts’ estimates. Net income hit 1.33 billion yuan, including gains from investments, while analysts projected a 502 million yuan loss.Backed by Tencent Holdings Ltd., Meituan is investing heavily in a plethora of online services from food delivery to travel, competing directly against Alibaba Group Holding Ltd. CEO Wang is trying to sustain a robust pace of growth by expanding into newer arenas such as ride-hailing, restaurant management and online groceries. That ambitious expansion has helped Meituan overtake the likes of Baidu Inc. to become China’s third largest publicly traded tech company.On a conference call after the earnings, executives said they will continue to invest in new areas like hotel booking and grocery services. The goal is to create a one-stop app for services, similar to the platforms Alibaba and Amazon.com Inc. have built for products.What Bloomberg Intelligence SaysMeituan is seizing order share across segments. Growth in hotel room nights outpaced the industry and Meituan wants to expand into high-end facilities next year.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.While Meituan has tightened its belt with less-profitable areas such as bike-sharing, it’s spending at a rapid clip to fend off Alibaba’s Ele.me in meal delivery and Fliggy in travel, an enormous outlay that’s compressing margins. Sustaining growth has also become a stiffer challenge as Chinese economic growth threatens to slide beneath 6%. Longer-term, Wang envisions a super-app modeled on Tencent’s own WeChat, extending a raft of everyday services such as payments to an increasingly wealthy populace.Meituan’s stock has more than doubled in 2019 -- easily outpacing Alibaba and Tencent -- as investors bet on its ability to safeguard its share of China’s fastest-growing internet services.\--With assistance from Pei Yi Mak and Venus Feng.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Oracle Corp. should increase the racial diversity of its board, a group of U.S. lawmakers said, putting a greater spotlight on the company’s hiring and management practices.“The fact that African Americans make up 13% and Asian Americans make up 5.6% of the U.S. population but 0% of Oracle’s board and leadership team is inexcusable,” said the lawmakers in a letter dated Nov. 22 from the House Tech Accountability Caucus and Tri-Caucus, which includes the Black, Hispanic, and Asian Pacific American Caucuses.The criticism is the latest call for the second-largest software maker and its billionaire Chairman Larry Ellison to improve diversity and inclusion. Former employees and the U.S. government have sued the Redwood City, California-based company, alleging it systematically underpaid women and people of color.Thursday’s letter is the second time this year that Oracle has attracted congressional scrutiny for its diversity practices. In January, the Congressional Black Caucus and House Tech Accountability Caucus wrote a letter to the company expressing dismay about allegations of pay discrimination.The letter dated Friday was signed by Representatives Robin L. Kelly, Joaquin Castro, Karen Bass and Judy Chu, who are chairs of the various House caucuses, among other lawmakers.The Tech Accountability Caucus has previously criticized Amazon.com Inc. for its tepid record of appointing non-white people to its board, and Facebook Inc. for allowing marketers to use ethnic affinity to target ads for housing, employment or credit.Amazon has since adopted a policy pledging to consider a diverse slate of candidates for any open board seats, and added Rosalind Brewer and Indra Nooyi as directors. Facebook in 2016 updated its ad policy to disable ethnic targeting for certain ads.“We respectfully request a prompt response from Oracle Corporation regarding our diversity concerns,” according to the letter. The group requested an executive-level briefing with the Congressional Tri-Caucus to discuss the issue, but said it would otherwise accept a written response within 14 days or via a phone call. Oracle didn’t respond to a request for comment.Oracle, in a February response to the earlier congressional letter, said it wouldn’t “intentionally discriminate against women and people of color” and was committed to a diverse, nondiscriminatory work culture, according to the lawmakers.Oracle is also contending with a January lawsuit from the U.S. Department of Labor, which alleged the company short-changed female and minority workers some $400 million in wages.The allegations stem from a 2014 audit by the unit, which enforces equal pay and other non-discrimination matters for federal contractors. Records show that Oracle paid women and minority employees less than others and steered them into lower-level jobs, the department has said in court papers. It also alleged that Oracle used H-1B visas to hire scores of Asians and paid them less than employees who were U.S. citizens.In 2017, three female engineers sued Oracle, alleging underpayment as compared to male engineers completing the same tasks. An analysis conducted on their behalf showed the company paid some women about $13,000 less per year on average versus male counterparts. The plaintiffs are seeking to represent more than 4,000 similarly situated employees.Oracle has denied the allegations in both cases.(Updates to show Oracle didn’t respond to a comment request in the eighth paragraph)To contact the reporters on this story: Nico Grant in San Francisco at firstname.lastname@example.org;Anders Melin in New York at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Despite the U.S.-China trade setback, stocks could still climb in 2019 and beyond, and the tech industry remains a key growth driver. Therefore, we searched for tech companies with our Zacks Stock Screener that also pay a dividend...
(Bloomberg) -- Former U.S. President Barack Obama warned that technology is creating a more splintered world, fueling the disparities among wealthy and poorer nations, and people within countries.“The rise of extreme inequality both within nations and between nations that is being turbocharged by globalization and technology” is one of the biggest risks for young people, Obama said Thursday at Salesforce.com Inc.’s annual Dreamforce conference in San Francisco. “New technologies have allowed us reach. We have a global market. I can project my voice and you can take your technology to new markets. It has also amplified inequalities.”Though his successor Donald Trump has taken presidential use of Twitter to new heights, Obama has long been associated with the tech industry. His 2008 and 2012 presidential campaigns were known for their use of the internet and social media to galvanize supporters. Some of Obama’s staffers came from Silicon Valley companies, including Alphabet Inc.’s Google, and there’s a diaspora of former Obama administration officials who have worked in the tech industry since leaving the White House, including David Plouffe, formerly with Uber Technologies Inc. and Amazon.com Inc.’s top spokesman Jay Carney.Still, the 44th president talked about how the internet has helped divide American politics and society.“People remark on the polarization of our politics and rightfully so,” Obama said. “People rightfully see challenges like climate change and mass refugees and feel like things are spinning out of control. Behind that, what I see is a sense of anxiety, rootlessness and uncertainty in so many people. Some of that is fed by technology and there’s an anger formed by those technologies.”Social-media services including Facebook Inc. and Google‘s YouTube have been accused of fueling polarization with algorithms that show people news and other content that match their preconceived thinking and viewpoints.“If you watch Fox News, you live in a different reality than if you read the New York Times. If you follow one rabbit hole on YouTube or the internet, then suddenly things look completely different,” Obama said during his conversation with Salesforce co-Chief Executive Officer Marc Benioff. “We are siloing ourselves off in ways that are dangerous. I believed, and I still believe the internet can be a powerful tool for us to finally see each other and unify us, but right now it’s disappointing.”Since leaving the White House in January 2017, Obama has become a fixture on the paid-speaker circuit. Thursday’s appearance at Dreamforce is at least Obama’s second appearance at a tech event in San Francisco in the last two months. He also spoke at a Splunk Inc. conference in September.To contact the reporter on this story: Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The latest U.S.-China trade war news. President Trump's Apple factory trip. Retail earnings, including Target. And why Applied Materials (AMAT) is a Zacks Rank 1 (Strong Buy) stock right now, all on today's episode of Free Lunch...
Applied Materials, Warrior Met Coal, Alibaba and Amazon highlighted as Zacks Bull and Bear of the Day
(Bloomberg Opinion) -- It is hard to think of a retailer that is doing so much to save itself, and has so little to show for it, as Macy’s Inc.The department store giant reported Thursday that comparable sales sank 3.9% from a year earlier in the quarter, or 3.5% including licensed departments, a sharp retreat from meager gains it had recorded on this measure in the first half of the year. It was such a weak showing that the company cut its profit forecast and now expects declining comparable sales for the full year.Of course, department stores have been challenged for years because they rely on an older customer and are often tethered to the types of malls that are withering in the e-commerce era. These latest results from Macy’s, though, coupled with a disappointing earnings report from Kohl’s Corp. earlier this week, increase skepticism that the giants of the category can find a formula for success before it’s too late.Macy’s has tried plenty of tactics to boost sales. It has an off-price segment. It is renovating its top-performing stores. It has dramatically expanded its selection online. But the steep decline in sales is a signal that it has not been enough.The company’s press release points to several reasons for the dismal results, including the weather (a go-to excuse for apparel retailers when things go off track) and soft international tourism (which affects sales at its big-city flagships). It also called out “weaker than anticipated performance in lower tier malls.”That third factor is noteworthy because it highlights the trouble with a major component of Macy’s turnaround strategy: The company is currently working to revamp about 150 stores while transforming its weaker locations into so-called “neighborhood stores” that are smaller in size and have fewer employees.The results raise the question of why Macy’s is clinging to these stores in dumpy malls. Macy’s needs to give more serious consideration to closing some of these locations.In other words: Macy’s may be doing a lot of things to salvage its business, but that doesn’t mean they’re the right things.The company said Thursday it will hold an investor day in February to discuss its three-year growth strategy. Any presentation that does not include a roadmap for additional store closures — and a clear plan for improving its actual merchandise — should be dismissed as unlikely to restore Macy’s to health.Kohl’s, a rival, is in a slightly better position than Macy’s, since its stores are typically not located in malls. But its third-quarter results also raised fresh doubts that it has carved a path to long-term relevance.Its new partnership with Amazon appears to be going largely as planned, with executives saying on an analyst conference call that it was “meeting expectations” and that conversion rates were on par with what it saw in pilot markets.But the Amazon arrangement is a creative move that should be providing new, young customers to Kohl’s. If all the retailer can deliver under those circumstances is a 0.4% increase in comparable sales, should that really excite investors about the program’s potential?It’s also discouraging that Kohl’s women’s business is adrift, recording declining sales in the quarter that offset more upbeat sales in departments such as men’s and footwear.Macy’s and Kohl’s shouldn’t delude themselves into thinking their would-be customers are simply sitting on the sidelines. TJX Cos., the corporate parent of Marshalls and TJ Maxx, recorded healthy comparable sales in the quarter. Target Corp. reported Wednesday that its apparel and accessories department saw a “double-digit” increase in sales in the period. It’s clear those better-run retailers are benefiting from Macy’s and Kohl’s stumbles.Building a vibrant 21st-century department store was always going to be a tall order. But Macy’s and Kohl’s latest reports raise the question of whether, for them, that goal is now out of reach.To contact the author of this story: Sarah Halzack at email@example.comTo contact the editor responsible for this story: Michael Newman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
VMware's (VMW) third-quarter fiscal 2020 results are expected to reflect continued enterprise deal wins, portfolio strength and partnerships with the likes of AWS and IBM.
(AMZN) — Amazon Music today announced critically acclaimed, multi-platinum singer-songwriter and EGOT winner, John Legend, has released a beautiful version of “Happy Christmas (War Is Over),” a Christmas song originally released in 1971 as a single by John & Yoko/Plastic Ono Band with the Harlem Community Choir, as an Amazon Original for the holidays. Produced by Raphael Saadiq, with additional vocals by Chrissy Teigen and daughter Luna, “Happy Christmas (War Is Over) (Amazon Original)” is out today, available to stream and purchase exclusively on Amazon Music.
(Bloomberg Opinion) -- The latest buzz in Hollywood is that the U.S. Justice Department wants to abolish an outdated rule known as the Paramount consent decree, which would allow studio giants to own movie theaters — something that hasn’t been permitted since the 1940s. My first thought was that it's a bit of a nothingburger. Studios like Warner Bros. and Universal probably aren’t eager to scoop up debt-laden cinema operators when their top priority is investing in streaming-TV content and services. And while mom-and-pop theaters may fear the change will breed anti-competitive behavior, that’s not as big of a concern for the big multiplex chains, nor does it signal an end to antitrust oversight. But that doesn’t mean everything is hunky-dory in the industry.Take a look at the U.S. box office this year. The content uniformity aside — four of the top seven movies descended from comic books, and the other three from cartoon franchises — most of the year’s leading films are Walt Disney Co. productions. There are more to come, with “Frozen 2” set to hits theaters on Friday, followed by the December release of “Star Wars: The Rise of Skywalker.” It has me wondering, is this healthy? Disney films account for nearly a third of the $9.5 billion of cinema tickets sold so far in 2019. Warner Bros., owned by AT&T Inc., lags far behind with a 16% share, trailed by Comcast Corp.’s Universal and Sony Corp.’s namesake distribution business; 20th Century Fox would normally be high in the ranking, too, but Disney acquired it earlier this year as part of an $85 billion deal with Rupert Murdoch.Look, I get it. Lots of people love Disney’s Marvel and animated features, and the box office is simply reflecting that. The situation is more complicated than just looking at the data and determining that the company has too much power; there’s nothing about the industry structurally that would give it an unfair advantage. Disney has just done a really good job of consistently giving fans what they want, and CEO Bob Iger made a series of smart acquisitions that continue to pay off: Pixar in 2006; Marvel in 2009; and Lucasfilm (home of “Star Wars”) in 2012. They’ve all absolutely flourished within Disney, with each bringing with it beloved franchises and story lines just waiting to be further developed and amplified for the big screen.It’s not like Warner Bros., Universal and Sony haven’t had the same opportunities. Warner Bros. has DC Comics, “Harry Potter” and “Lord of the Rings,” and the studio shares a home with HBO and “Game of Thrones.” Sony owns the rights to Spider-Man; it even had the chance to buy the entire Marvel roster in the late 1990s (for pennies compared to what Disney paid). It's hard, though, to imagine Marvel would have become what it is today had it landed at Sony instead of Disney. And that’s kind of my point.Matthew Ball, the former Amazon Studios executive, made a similar argument recently: “Disney isn’t a monopoly,” he tweeted Nov. 5. “Its competitors just need to do better. ... You make success. No one believed in comics being huge 20 years ago.”It's conceivable that Disney may end up atop the streaming world, too. Apple TV+ hasn't lived up to the hype, while AT&T’s HBO Max may suffer for its delayed arrival to the market (in May 2020). In very Comcast fashion, the cable giant isn’t so much plunging into streaming as it is dipping a toe into the waters with its Peacock app next year. And Sony’s PlayStation Vue service has already thrown in the towel. Meanwhile, Disney+ had a wildly successful launch on Nov. 12, signing up 10 million subscribers on the first day, despite widespread technological glitches and shortcomings in app functionality. Disney is also the first to experiment with bundles, a relic of the cable-TV market that I’ve argued will help ease one of the worst consumer pain points of streaming: the inability to access all your favorite content through a single subscription.But when people are rooting for Disney to be the “Netflix killer,” they’re rooting against themselves. Netflix Inc.’s innovation brought us affordable TV entertainment that didn't require a cable subscription or patience for commercial breaks. Its success forced other more complacent companies to rethink their businesses. By contrast, the box office shows what happens when a single company winds up with outsize influence.The Justice Department’s move to terminate the Paramount consent decree may not mean much (Disney wasn’t even one of the studios bound by it). But Disney doesn’t need to buy a theater anyway — it already owns the box office. Other media and tech giants should take that as a warning to step up their streaming game. Healthy competition ensures better content, more choice and further Netflix-like advances. Plus, the world needs only so many superhero flicks.To contact the author of this story: Tara Lachapelle at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Sony Corp. is in talks to acquire a stake in the Indian television network controlled by billionaire Mukesh Ambani, as the Japanese giant seeks to tap booming demand for content in the South Asian nation, according to people familiar with the matter.The Tokyo-based company is currently conducting due diligence on Ambani’s Network18 Media & Investments Ltd. before any possible offer, the people said, asking not to be named as the information is not public. Sony is considering several potential deal structures, including a bid for the company or a merger of its own Indian business with Network18’s entertainment channels, one of the people said.Talks are at a preliminary stage and may not result in a transaction, the people said. Shares of Network18 surged as much as 19% in Mumbai on Thursday, while unit TV18 Broadcast Ltd. jumped 9.7%.While a successful deal may help Sony bolster its local offerings and take on upstart rivals such as Netflix Inc., it will give Ambani access to international content. The Indian tycoon’s wireless carrier, Reliance Jio Infocomm Ltd., has spent almost $50 billion in the past few years on its network to disrupt India’s telecommunications industry and has been luring users by offering local and overseas programming.“Our company evaluates various opportunities on an ongoing basis,” a spokesman for Ambani’s Reliance Industries Ltd., said in an email, declining to comment further. Representatives for Sony in India and Japan didn’t immediately respond to requests for comments.The talks come at a time when competition is heating up for paying viewers in a potentially lucrative market with more than half a billion smartphone users. Streaming companies such as Netflix to Amazon.com Inc. Prime are increasingly offering programs created locally to lure subscribers. Ambani’s Jio, while having the technology platform, is limited by the paucity of content it can stream, making such a deal with Sony crucial.“India is a massive OTT market, and any international OTT play will need to bolster its local strategy,” said Utkarsh Sinha, managing director at Bexley Advisors, a boutique firm in Mumbai, referring to over-the-top or streaming media services. “More partnerships or strategic alliances like this are likely in the next year or so.”Inside the Most Watched YouTube Channel in the WorldReliance Industries, the oil-to-petrochemicals conglomerate, unveiled plans last month to set up a digital-services holding company to fulfill the mogul’s ambitions for an e-commerce platform aimed at taking on the likes of Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.Sony operates in the South Asian country through Sony Pictures Networks India, which has a bouquet of channels including Sony Entertainment Television, reaching over 700 million viewers in India.TV18 Broadcast owns and operates 56 channels in India spanning news and entertainment. It also caters to the global Indian diaspora through 16 international channels.(Updates with analyst’s comment in seventh paragraph)To contact the reporters on this story: Baiju Kalesh in Mumbai at email@example.com;Anto Antony in Mumbai at firstname.lastname@example.org;P R Sanjai in Mumbai at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, ;Sam Nagarajan at email@example.com, Arijit GhoshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Amazon.com Inc. is preparing to open Amazon Go supermarkets and pop-up stores, an expansion of the company’s cashierless ambitions that includes the possibility of licensing the technology to other retailers.The new store formats and licensing initiative could launch as soon as the first quarter of 2020, according to a person familiar with the project. Amazon is testing a supermarket equipped with Go technology in a 10,400-square-foot retail space in Seattle’s Capitol Hill neighborhood.The Go expansion is the e-commerce giant’s latest attempt to compete in the $900 billion U.S. grocery industry and perhaps other areas of retail, as well. The company already operates the Whole Foods Market chain and last week confirmed plans to launch a separate supermarket brand, starting with a location in the upscale Woodland Hills neighborhood of Los Angeles. Those stores will have human cashiers. The previously unreported plan to expand Go revives Amazon’s original vision of creating full-size grocery stores without checkout lines. Amazon opened the first Go convenience store at its Seattle headquarters almost two years ago and now operates 21 locations around the U.S. It’s not clear how much money the company has lavished on the project, but some of the 1,000 or so people working on it were recently told their cumulative salaries have totaled more than $1 billion since the project got underway in 2012, the person said.Customers have praised the Go stores as technical marvels. But retail analysts have wondered whether the low margins at a typical corner store chain would offset the costs of the Go technology, a complicated array of cameras and software that figures out what shoppers have grabbed and automatically charges them when they exit. The Go team, which recently folded previously separate hardware groups and engineering support staff into a new entity called Physical Retail Technologies, has spent the past two years streamlining the technology. The efforts were aimed at making the existing Amazon Go stores more profitable and the guts of the system cheap enough to entice other retailers, said the person, who requested anonymity to discuss an internal project.Amazon declined to comment. People familiar with the program estimate that Amazon spent millions of dollars on the cameras, networking gear and servers in the first store alone. Newer versions of Go’s hardware feature fewer backroom servers and more efficient cameras, software and networking capabilities, substantially cutting the cost of setting up a new store, the person said.Amazon had originally envisioned a larger Go supermarket before abandoning the concept in favor of simpler, smaller convenience stores. Most Go locations are close to 2,000 square feet and stock grab-and-go staples—cold drinks, packaged sandwiches, salads—and a smaller selection of such household items as cold medicine and phone chargers.Now, having improved the technology, the company is getting closer to its original ambition. Amazon aims to support stores as large as 30,000 square feet, the size of a typical modern supermarket. At the Capitol Hill space in Seattle, engineers are stress-testing the camera arrays with large groups of people, the person said. (Amazon confirmed to technology news site GeekWire last month that the Go team was running tests at the site.)The Go teams are also working on a sort of pop-up kiosk, a self-contained, miniature version of an Amazon Go, designed for faster setup than equipping leased retail space with all of Go’s hardware. Potential users include malls and sports stadiums, the person said.The Information reported in September that Amazon Go’s operating losses had widened as the program expanded, to a projected $41 million to $58 million in 2020, and that store openings had fallen short of Amazon’s earlier projections. The technology news site also said the company was planning other store formats, including the Capitol Hill grocery location, and had considered launching more of a smaller Go model launched in 2018 inside an Amazon office building in Seattle.CNBC, which reported in September that Amazon was exploring licensing the technology behind Go, said the company had held talks with airport concessions operator OTG’s CIBO Express brand, and Cineworld Group PLC’s Regal movie theater chain. The person said both chains were prospective customers. OTG declined to comment. Regal didn’t respond to requests for comment.Related: Read More from CheckoutAmazon hasn’t settled on a licensing business model. Options under consideration vary by industry and include charging an upfront fee for use of the system or a percentage of total sales of a Go-equipped store, the person said.Amazon is famous for trying many things out—including separate supermarket chains with and without cashiers—so some analysts have viewed Amazon Go as an expensive retail experiment. Now, it’s clearer that Amazon is serious about mainstreaming the technology.“The big question isn’t will the tech work—Amazon will make it work,” says Brendan Witcher, who tracks retail and consumer behavior at Forrester Research. “The question will be, ‘Will it work for a consumer, will they see this way of shopping as valuable?’” (Updates with report from The Information on Amazon Go operating losses and store format plans. )To contact the author of this story: Matt Day in Seattle at firstname.lastname@example.orgTo contact the editor responsible for this story: Robin Ajello at email@example.com, Andrew MartinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Amazon.com Inc. loves to tinker and test. Sometimes projects that seemed like mindless fiddling — the Kindle e-reader, the Prime shopping club, its Amazon Web Services cloud-computing operation — turned out to be important advances for the company, its customers and the technology industry.Despite that history, I have to ask: Does Amazon know what it’s doing in groceries?When Amazon agreed to buy the Whole Foods supermarket chain for nearly $14 billion more than two years ago, it was regarded largely as a bold masterstroke. Groceries and other household goods are a magical category of consumer spending, with close to $1 trillion spent in the U.S. each year. The combination of large spending, the frequency of grocery shopping and its relative lack of e-commerce penetration has made groceries a prime (pun intended) target for Amazon, China’s Alibaba Group Holding Ltd. and other new economy giants.So far, Amazon’s serious foray into groceries is marked by head-scratching tactics and middling financial and strategic performance. It’s still early in the supermarket era for Amazon, and it’s never wise to count the company out. Still, unlike Amazon’s history of wild experiments that became wild successes, the company doesn’t have the field of grocery innovation entirely to itself. And it remains unclear whether Amazon has a novel or sensible idea to take grocery shopping in a fresh direction. For now, Amazon has a growing grocery sprawl. Customers can buy groceries and household goods from Amazon in a tangle of spots: its eponymous website; Prime Pantry, a separate shopping club for bulky household goods; the 12-year-old Amazon Fresh grocery delivery service that is expanding; Whole Foods and its separate and expanding delivery operation; the Prime Now delivery service for orders in some cities in one or two hours; Amazon’s couple dozen Go convenience stores without cashiers; a different supermarket chain that Amazon is starting from scratch; a couple of drive-in grocery pickup kiosks in the Seattle area; and — if you’re not exhausted yet reading this list— Bloomberg News reported Wednesday that Amazon wants to take the cashier-less Go technology into larger, supermarket-sized stores.There may be a method to Amazon’s grocery madness. For now, it just looks like madness.The company’s most established grocery operation, Fresh, has languished for years. Amazon has made sensible changes at the 500-store Whole Foods chain, but there have been few of the earth-shattering retail innovations that people expected or feared at the time of that acquisition. And Amazon, which has had patchy success with online shopping outside the U.S., has a largely parochial supermarket operation.Investors barely press Amazon to explain its performance and strategy with Whole Foods and its other food initiatives, and Amazon has obliged by not saying much. Amazon’s limited financial disclosures are enough to make me wonder whether groceries sales at U.S. market leader Walmart are growing faster than those at Amazon’s relatively pipsqueak operation.Amazon’s reported third-quarter revenue growth for its physical stores, which include Whole Foods, Go stores and Amazon’s collection of bookstores — declined 1% from a year earlier after adjustments for movements in foreign currencies. This growth figure excludes Whole Foods delivery orders or purchases made for pickup in stores — fast-growing categories of grocery spending.Amazon in previous quarters provided adjusted figures that indicated its physical stores’ revenue growth was closer to 5% to 6% including online and pickup orders. Walmart in the third quarter said its U.S. grocery operation recorded a “mid-single-digit” percentage comparable sales growth — roughly the same range, you’ll notice, as Amazon’s earlier growth figures.The strategic and financial costs for Amazon’s grocery initiatives are enormous. Whole Foods was by far Amazon’s largest acquisition in its history. My Bloomberg News colleagues previously reported that Amazon has spent hundreds of millions of dollars on Go stores, and that may be a lowball figure. In Wednesday’s article, Bloomberg reported that some of the 1,000 or so people working on Go were recently told their cumulative salaries have totaled more than $1 billion since the project started in 2012.A larger, suburban-sized grocery store is what Amazon originally imagined for its cashier-less Go stores before deciding that megamarkets were overly ambitious. The smaller-format Go stores certainly have received much attention — and they are the genuinely novel idea that Amazon hasn’t showed in its other physical store attempts. Still, it’s hard to call the Go stores a success so far, and Amazon has been less ambitious with their rollout than it planned initially.The sophisticated technology behind shopping with as little human interaction as possible is a promising idea, and it could be licensed to non-Amazon supermarkets or other retail stores, as Amazon, Microsoft Corp. and other technology companies are trying. I do wonder whether retailers that compete with Amazon — essentially all retailers these days — will be willing to pay to use technology from a competitor. Those fears, and the response by technology companies and grocers to Amazon’s push into food sales, are among the signs that Amazon may have less time to tinker than it did in the past. It’s the company that everyone else watches closely, to immediately imitate or respond to what it is doing. Amazon has a long leash from investors to figure out tactics that will give the company a crack at an enormous chunk of people’s wallets. The experience of shopping for groceries definitely could use fresh ideas and approaches. I’m just not convinced that Amazon has them.To contact the author of this story: Shira Ovide at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Nov.20 -- Amazon.com Inc. is preparing to open supermarkets and pop-up stores without cashiers. It's an expansion of the technology used in Amazon Go convenience stores. Bloomberg's Matt Day reports from Seattle on "Bloomberg Technology."