What Does Amazon Mean for Costco Stock?
To the question of what's the most feared competitor in retail, the answer is simple.
Amazon (NASDAQ: AMZN) has demonstrated time and again its desire to disrupt as many corners of the retail industry has possible, and Wall Street tends to give the tech giant a wide berth. For instance, when Amazon acquired Whole Foods Market in 2017, supermarket stocks fell broadly, including Sprouts, Supervalu, Walmart, and Costco (NASDAQ: COST), as investors feared that the industry was about to experience the "Amazon effect."
When the tech giant enters a new market, it often does so by undercutting competitors on price in an attempt to gain market share, and by leveraging its Amazon Prime loyalty program. However, Amazon's takeover of Whole Foods hasn't brought a reckoning in the grocery industry the way many expected, and recently there have been signs that Amazon is favoring other vehicles, like its new Fresh supermarket, moving Whole Foods from the spotlight.
Source Fool.com
