Goldman says AmazonFresh, "could prove a major catalyst for revenue growth and long-term profitability at Amazon," according to Business Insider. The firm says there is a chance for Amazon to increase its sales volume, adding that online sales in grocery currently comprise just 0.5 percent of the $1 trillion industry.
New players have also made significant gains in the grocery space before. Goldman points out that since 1996, Walmart has grown grocery sales from 0 percent to 56 percent of its total sales. Goldman notes that since 1998, grocery has represented 64 percent of Walmart's total growth each year.
Bringing AmazonFresh to up to 25 cities over the next five years could require investment of up to $1 billion per year, Goldman said. But the firm says Amazon has one of the best track records in the market in getting high returns on its investments, also noting that, "ongoing investment in fulfillment and infrastructure will widen Amazon's competitive lead."
Goldman said that Amazon's network of trucks for AmazonFresh could also improve margins in its last mile fulfillment network.
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