In the battle to gain market share among cost-conscious consumers in the wake of tariffs and inflation, Amazon.com Inc (NASDAQ:AMZN) is ready to heat things up.
AMZN stock is in a favorable position. Follow the breaking news here.
What Happened: Known best for its e-commerce business model of having items shipped to homes in a few days or even less, Amazon is ready to offer more goods under $5 for consumers.
The company recently announced the launch of Amazon Grocery, a private label food brand that unites goods from past brands such as Amazon Fresh and Happy Belly.
Amazon Grocery offers more than 1,000 food items, including customer necessities such as milk, produce, meat, snacks, beverages, baking essentials and seafood. The majority of the Amazon Fresh items are priced under $5.
Amazon is also launching several new items under the Amazon Grocery brand that it previously hasn’t offered, such as cinnamon rolls, pizza dough, bottled spring water and lemonade.
“With Amazon Grocery, we’re simplifying how customers discover and shop our extensive private label food selection while maintaining the quality and value our customers expect and deserve,” Amazon Worldwide Grocery Stores Vice President Jason Buechel said.
Buechel, who is also CEO of Amazon’s Whole Foods Market division, said the Amazon Grocery launch includes items at competitive prices to help customers with their grocery budgets.
“During a time when consumers are particularly price-conscious, Amazon Grocery delivers more than 1,000 quality grocery items across all categories that don’t compromise on quality or taste.”
Amazon Grocery products can be found online at Amazon.com and Amazon Fresh online, along with Amazon-owned stores nationwide.
The e-commerce company plans to launch more products under the Amazon Grocery brand in the coming months, including frozen pasta meals, pie fillings, granola and an expanded selection of deli meats.
Read Also: Amazon Q2 Earnings Highlights: Double Beat, ‘AI Progress Across The Board Continues’
Why It’s Important: Amazon has grown significantly from its former days of just being an online bookstore. The company now offers almost everything for consumers, with many items shipped within a few days.
Amazon said its private-label brands had momentum in 2024, with customers buying 15% more private-brand products than in the previous year.
Private-label brands for Amazon allow the e-commerce company to offer similar products from other consumer product and food companies, often at lower prices and with better margins.
Customers will often trade down from brand-name products to private-label to save on their grocery costs. Retailers such as Amazon and Walmart Inc (NYSE:WMT) recognized this and offer more private-brand products.
With the latest launch, Amazon could better compete with Walmart and with discount retailers such as Family Dollar and Dollar General Corp (NYSE:DG).
Amazon analysts praised the company’s growth momentum among its growing assortment of “Everyday essentials” items, after the company reported second-quarter financials.
Everyday essentials and the new launch of Amazon Grocery could be key items when Amazon reports its next quarterly results.
The focus on items under $5 shows how much emphasis Amazon and other retailers are putting into price points when trying to keep and reach new customers.
Read Next:
Amazon Hits 1 Million Robots, Should Human Workers Be Worried?: Company Says ‘Creating New Career Opportunities’
Photo: Shutterstock