Page 9 - [STUDY CASE_GROCERY WARS] Report

QUESTION 2
Compare the role of grocery sales in Amazon and Walmart’s
business strategies.
In the United States, grocery
shopping generates $800 billion in
sales, and both Walmart and
Amazon want to be the country's
largest grocery retailers.
$800 billion
6
In 2016, Amazon purchased Whole
Foods Market in order to gain a
foothold in the grocery market and
establish a physical presence.
Amazon accomplishes this by
utilizing Whole Foods' pre-existing
prime locations as a distribution
point for bringing products closer
to customers. Whole Foods also
adds a stamp of approval to
Amazon's grocery services, such as
Amazon Go. Using grocery,
Amazon aspires to become a one-
stop shop for customers, where
they can get everything they need,
including groceries, from a single
location.
In Walmart's business strategy,
grocery sales play a completely
different role because they want to
compete with Amazon by
expanding into e-commerce.
Walmart already accounts for up to
18 percent of the grocery market in
the United States, and it needs to
expand online and invest in
technology to meet its goal of 40
percent growth in online sales.
Walmart's total sales are made up
of 56 percent of grocery sales, and
if it loses the grocery war with
Amazon, it has no chance of
overtaking Amazon as the world's
largest e-commerce player.