Greg's Corner

Are we headed for a retail duopoly?

Wal-Mart is the number one retailer in the US with a substantial web presence. They see Amazon as their greatest competitor. Amazon is the number one online retailer and they’ve been looking to get into the physical retail space. They see Wal-Mart as their greatest competitor. Now, Amazon is firing a shot across Wal-Mart’s bow as they are in the process of acquiring organic grocery store Whole foods.

While not even coming close to Wal-Mart’s almost 5,000 locations across the country, including Wal-Mart Neighborhood Market and Sam’s Club, this acquisition would give Amazon a substantial foot in the door in the country’s grocery market. With its already popular online business, with just 400 possible new locations it actually could give Wal-Mart a run for its money if they’re also used as small distribution or pick up centers for online orders. Not only that, but Amazon could also end up taking a piece out of Wal-Mart’s grocery share in the country, which is where Wal-Mart makes most of their money.

What could be worrying is Wal-Mart’s response to Amazon’s potential acquisition. A lot of brick and mortar store chains have crumbled under the might of the Wal-Mart. Sears and K-Mart used to be giants in the industry. Sears alone has been around since the 19th century, but is now facing the spectre of closure. If this trend continues, we could all end up shopping at either a Wal-Mart or Amazon branded store in the near future. Competition always breeds innovation in business, but a near monopoly between two retail monoliths will cause not only stagnation, but will also allow the two corporate giants to become complacent in their pricing.