Street Calls of the Week
SEATTLE - Amazon (NASDAQ:AMZN), the $2.34 trillion retail giant, announced Wednesday the launch of Amazon Grocery, a new private label brand featuring more than 1,000 food items across various categories. The new brand consolidates the company’s Amazon Fresh and Happy Belly brands into a unified grocery collection. According to InvestingPro data, Amazon maintains a robust 49.61% gross profit margin, positioning it well for this strategic expansion.
The product lineup includes fresh produce, dairy, meat, seafood, pantry staples, and snacks, with most items priced under $5 and rated 4 stars or higher by customers. Popular products include cage-free eggs, pre-sliced bagels, ground beef, and jasmine rice.
"With Amazon Grocery, we’re simplifying how customers discover and shop our extensive private label food selection while maintaining the quality and value our customers expect," said Jason Buechel, Vice President of Amazon Worldwide Grocery Stores and Chief Executive Officer at Whole Foods Market, in a press release statement.
The company reports that customers purchased 15% more private-brand products in 2024 compared to the previous year across Amazon.com, Whole Foods Market, and Amazon Fresh. This private label growth complements Amazon’s overall revenue expansion, which InvestingPro shows reached $670 billion in the last twelve months, with a solid 10.87% year-over-year growth rate.
New product offerings include fresh bakery cinnamon rolls, refrigerated pizza dough, bottled spring water, and refrigerated lemonade. Amazon plans to expand the selection in coming months with frozen pasta meals, pie fillings, granola, sliced loaf cakes, and additional deli meats, canned beans, and frozen vegetables.
The new packaging features a modern design with bold typography and reduced plastic usage. For example, Amazon Grocery apples now use 50% less plastic than previous packaging.
Amazon Grocery products are available on Amazon.com and in Amazon Fresh stores nationwide, complementing the company’s other private label offerings including Amazon Saver and 365 by Whole Foods Market. With an overall financial health score rated as GOOD by InvestingPro, which offers 8 additional key insights about Amazon’s valuation and growth prospects in its comprehensive Pro Research Report, the company appears well-positioned to support this expansion.
In other recent news, Amazon has agreed to pay $2.5 billion to settle charges from the Federal Trade Commission regarding its Prime subscription practices. This settlement includes a $1 billion civil penalty and $1.5 billion in consumer refunds for approximately 35 million affected individuals. Additionally, Amazon has expanded its Buy with Prime service to include products from lifestyle brands Dearfoams and Baggallini, enabling Prime members to enjoy benefits like fast, free delivery on these brands’ websites. In a separate development, Amazon has entered a multi-year partnership with FanDuel to become the official odds provider for NBA and WNBA games on Prime Video.
In the realm of financial analysis, Mizuho has initiated coverage on Amazon with an Outperform rating, highlighting expectations for Amazon Web Services growth to accelerate to 22% by 2026. This forecast surpasses the current consensus estimate and anticipates increased capacity coming online in the latter half of 2025 and throughout 2026. Meanwhile, Citizens JMP has lowered its price target for The Trade Desk, citing concerns over a slowdown in advertising spending in certain sectors and potential regulatory impacts. These developments reflect ongoing strategic moves and market assessments impacting Amazon and related companies.
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