Costco Latest Food Retailer To Fight Amazon In Delivery Business
Costco is the latest retailer to be hit by Amazon’s force, now that Amazon has entered into the food delivery business. But, Costco is not going down without a fight.
On Friday, Costco’s stock price fell after the retail giant said the competition in the grocery delivery business is fierce and getting more so. Chief Financial Officer Richard Galanti said in the company’s results call that the retailer had started offering online delivery as an option, in addition to an in-store based delivery already available in hundreds of stores including Phoenix and Tucson.
Galanti said online delivery and e-commerce will draw a younger customer. Amazon’s food delivery business is being blamed for eating into the margins of Costco, Kroger and Wal-Mart. Groceries are a low-margin business. Competition has further tightened since Amazon bought Whole Foods in August and begun to reduce prices there.