Scott Kilmartin, an e-commerce expert and host of the "David Versus Amazon" podcast, said the purchase of US Target would "give them access to the everyman customer and would be the physical retail step to becoming the offline "everything store". Should Amazon actually acquire Target, delivery of groceries would likely become a major offering.
Loup Venture co-founder Gene Munster is predicting that Amazon will acquire Target to expand its brick-and-mortar presence. As for retail stores, Amazon's acquisition of Whole Foods 470 stores along with testing of the Amazon Go retail concept is evidence that Amazon see's the future of retail as a combination of mostly online and some offline.
The analyst is predicting that online shopping giant Amazon.com will make a bid for United States department store Target this year to bolster its retail offering following Amazon's US$13.7 billion acquisition of upmarket grocer Whole Foods in the U.S., according to a report today in Bloomberg.
Loup Ventures admits that the timing of such a deal is hard to pin down, but "seeing the value in the combination is easy". Amazon spent almost $14 billion in 2017 to buy Whole Foods, and the e-commerce giant should have little trouble putting together financing for a deal that would wind up being more than double that. Amazon didn't immediately respond to a request for comment.
Following the publication of the prediction, which Mr Munster said would see Amazon pay a 15 per cent premium for the company, Target stock jumped 3.5 per cent. Amazon has, over the years, aggressively pursued mum's through promotions around Prime along with loading Prime Video with kid-friendly content.
It's shaping up to be a critical year for Target Corporation (NYSE:TGT), as rumors continue to swirl about a possible buyout from Amazon.com (AMZN) later in 2018. The decision would make a lot of sense, as Target already operates over 1,800 stores and is popular with the mother and family demographic. This suggests the retail stock could be overdue for both upgrades and further price-target hikes.
"Amazon has to chew and swallow before it can really take another bite of anything else", she said. "A deal with Amazon allows the combined company to consolidating their operating expenses and build a new working model that provides much better bottom line", Fosina said. Last month, CFRA bank analyst Ken Leon predicted that it will purchase a small or mid-size bank.