There is no doubt that Amazon is dominating the retail world and competitors are not happy. According to MKM Partners analyst, Rob Sanderson, Amazon is “eating the retail world”. The chart below shows Amazon, in the categories that the company serves, growing its market share, as brick-and-mortar retail sales are on the decline.
The gap has continued to widen over the past couple of years. Amazon is growing while competitors like Wal-Mart, Home Depot, Costco and Target continue to lose market share as their “margins shrink and the dollars shift back to Amazon”, added Sanderson.
His bottom line: Amazon is the “best long-term growth story available to investors today.” He notes that Amazon’s share of retail sales in key categories – sporting goods, clothing, personal care and electronics – will only continue to grow from here.
The median growth for what MKM Partners calls the top-20 U.S. retailers was 2.4% in 4Q16, 0.8% during 1Q17 and is forecast to decline by 0.2% in 2Q17 this year, the firm said.
The pressure is on for traditional retailers and Amazon continues to take them head on, especially as Amazon enters into the grocery business.
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