Can Walmart (WMT) succeed in the Age of Amazon?

Thus Walmart’s investments in technology could pay off with lower operating costs. Notably, one way technology is saving Walmart money is by eliminating the need for employees.
For instance, Walmart is eliminating 700 to 1,000 jobs at its Arkansas headquarters. In addition, Walmart cut 7,000 back-office accounting workers in its stores in 2016.
Hence, Walmart and its investors are profiting from technological unemployment. Interestingly, further job cuts are likely at Walmart because the company will deploy robot janitors in its stores.
Walmart is testing 360 janitorial robots in its stores, Bloomberg reports. In detail, the machines are robotic floors scrubbers built by a company called Brain Inc.
Robots are conducting inventory in some Walmart stores, Bloomberg claims. In addition, Walmart is testing robots that pull grocery orders in fulfillment centers and superstores, TechCrunch reports. A company called Alphabot builds the robots

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Is Amazon Pay coming to Brick and Mortar Stores?

QR code has other advantages including the ability to work with almost any phone with a camera. Moreover, Walmart (NYSE: WMT) accepts QR code apps but not NFC. Hence, Walmart could accept Amazon Pay but not Apple Pay or Google Pay.
Additionally, Walmart offers its own QR code wallet called Walmart Pay. Markedly The Journal did not say if they will integrate Walmart Pay with Amazon Pay.

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Why Sprouts (SFM) cannot survive

Sprouts’ dilemma is that Amazon is just one of its competitors. Besides Amazon sprouts has to compete with Kroger (NYSE: KR), Walmart (NYSE: WMT), Aldi, and Target (NYSE: TGT) to name just a few.

For example, Kroger has a close relationship with Instacart and it is America’s largest organic grocer. For example, Kroger sold $1 billion worth of organic produce in 2017, Progressive Grocer estimates. In addition, Kroger sold $2 billion worth of its Simple Truth organic grand in 2017, Progressive Grocer calculates.

Under those circumstances, I cannot see how Sprouts can compete and survive as an independent company. Instead, Sprouts’ future will be as part of a larger organization – such as Aldi Nord or Kroger.

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McDonald’s (MCD) and the Incredibly Shrinking Revenues

Second, McDonald’s now faces serious competition from supermarkets, Walmart (NYSE: WMT), convenience stores, and even Amazon (NASDAQ: AMZN). For example, Amazon’s Go cashierless convenience store sells a wide variety of readymade food.

In detail, Go is selling salads, sushi, sandwiches, soups, and other items. Many of those items sell for the same price as a Big Mac.

Unluckily for McDonald’s, Amazon Go is the latest entry in a crowded ready to eat market place. Kroger (NYSE: KR), in particular, has been pushing a wide variety of hot and cold ready to eat foods through its supermarkets for years.

Markedly, some Kroger Marketplace stores contain pizzerias, Asian cafes, and even cheese sandwich restaurants. Nor is Kroger alone, Amazon subsidiary Whole Foods sells an incredible variety of ready to eat foods.

This ready to eat revolution is a direct threat to McDonald’s because it offers a wide variety of consistent food at a competitive price. In addition, the ready to eat food is every bit as a fast and convenient as McDonald’s.

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Amazon (AMZN) owns Retail, can Anybody Compete?

It should scare brick and mortar retailers because Amazon Go could generate profits similar to Amazon itself.

For instance, Amazon Go could generate up $2,700 a square foot in annual sales per square foot, Brick meets Click, claims. In contrast, Costar estimated Walmart’s annual sales-per-square foot was $325 in 2018.

Thus Amazon Go’s sales per square foot could be seven times those of Walmart’s. However, the Apple Store’s sales per square foot were nearly twice Amazon Go’s at $5,546 in 2017.

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Target (TGT) Making Money amidst the Amazon Apocalypse

An obvious added benefit to Skip-the-Line is keeping ship-to-store customers out of register or service-counter lines.

Moreover, an associate with a tablet could reduce lines by asking customers if they want to pay via Skip-the-Line. Therefore, associates will spend all their time stocking and helping customers rather than standing behind a register.

Additionally, Skip-the-Line could make it faster, easier, and cheaper for Target to open new stores. To clarify, Target might open new stores with fewer registers and no customer service desk.

An obvious long-term goal of the Skip-the-Line is stores without cash registers. Thus, Target could open up in empty stores, buyout smaller chains, or open pop-up stores in malls and other retailers’ locations instantly.

A Target pop-up store inside a Kroger supermarket, a mall, or even a subway station for example. Obviously, Skip-the-Line will enable to open pop-ups all over the place without registers.

Another use for Skip-the-Line will be to allow delivery drivers to collect payment directly from customers. To explain, the driver will carry a Skip-the-Line device that will collect payment from the customer before delivery.

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Google Pay in Scandinavia

Apple (NASDAQ: AAPL) is desperate to get people to use Apple Pay. In fact Apple employees were wandering around Chicago begging people to use the mobile wallet.
Apple salespeople were going door to door on October 7 in Chicago’s Lincoln Park in an effort to push the wallet, Bloomberg claims. The “ambassadors” were touting a $1 taco promotion at food trucks in an effort to promote Apple Pay.
Apple claims that 60% of US merchants have the equipment to accept Apple Pay. Unfortunately, most of the big names in American retail including Walmart, Kroger, and Target, refuse to accept Apple Pay.
Notably, Target (NYSE: TGT) even refuses to accept Apple Pay in its wireless Skip the Line system. To explain, Skip-the-Line is a mobile device that lets shoppers pay Target associates with credit cards or the Target app without going to a cash register. However, Apple Pay users can pay at Target through the Target app.

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Will CVS-Aetna Make Money?

The financial data indicates that CVS-Aetna will probably make money. For example, Aetna reported a gross profit of $4.5 billion on revenues of $15.561 billion for 2nd Quarter 2018.

In addition, CVS Health recorded a gross profit of $7.201 billion on revenues of $46.78 billion for 2nd Quarter 2018. Therefore, CVS-Aetna could generate a quarterly gross profit of $11.7 billion and quarterly revenues of $62.341 billion.

However, CVS Health recorded an operating loss of -$1.590 billion and a net loss of -$2.563 billion for 2nd Quarter 2018. Meanwhile, Aetna recorded an operating income of $1.684 billion and a net income of $1.212 billion for 2nd Quarter 2018.

Thus, cynics will argue that CVS is trying to cover its losses by buying Aetna. This argument is unconvincing because Aetna-CVS could make an operating income of $94 million and a net loss of -$1.351 billion.

Hence, CVS-Aetna will lose money with the financial numbers both companies reported on June 30, 2018. That makes CVS-Aetna a very dubious stock from a value investor’s standpoint.

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