Market Overview

Is Amazon The New Costco?

Share:
Is Amazon The New Costco?

Is Amazon.com, Inc. (NASDAQ: AMZN) the "new" Costco Wholesale Corporation (NASDAQ: COST)? According to SW Retail Advisors President Stacey Widlitz it just may be.

Speaking as a guest on CNBC's "Retail Detail" segment, Wildlitz noted that department store names reported in their recent quarterly print that foot traffic to their stores "drove off a cliff." She continued that consumers are still shopping, just differently so.

One of the biggest shifts in spending is a move away from buying items in bulk from Costco in favor of buying the same products on Amazon's platform.

"You cannot underestimate the power of Amazon," Wildlitz said. "You can order as much as you want and if you are a member of Prime — in which 25 percent of households in the U.S. are — it comes to your house and you can return it no problem."

Related Link: Amazon To Produce Its Own Brand Of Diapers, Baby Foods And More

Amazon's continued dominance may translate to 25 percent of retail's square footage "go away."

Finally, Wildlitz suggested that retailers such as H&M are incorporating the wrong growth strategy, as the "fast fashion" retailer is looking to double its square footage presence over the coming years at a time when the trend is clearly shifting to online purchases.

Posted-In: Amazon Prime CNBCLong Ideas Psychology Top Stories Media Trading Ideas General Best of Benzinga

 

Related Articles (AMZN + COST)

View Comments and Join the Discussion!

Skyworks Executive Transition 'Absolutely No Surprise'

Weibo Has Limited Upside, Goldman Says Amid Downgrade