How Amazon Is Hurting Walgreens' Business: Jim Cramer Explains
After Walgreens reported a disappointing quarter, Jim Cramer explained why Amazon is making it difficult for the drugstore giant to succeed.
$Walgreens Boots Alliance(WBA.US$ ' stock hit a new 52-week low, dropping 22% after earnings missed expectations. The company also reduced its full-year guidance, citing a difficult operating environment and pressures on the U.S. consumer.
Cramer highlighted several issues for Walgreens:
- Higher Costs and Lower Convenience: Walgreens is more expensive and less convenient than Amazon.
- Staff Shortages: There are not enough employees at Walgreens stores.
- Theft Issues: Many items are locked behind plexiglass, frustrating customers.
- Competition from Amazon Pharmacy: While Walgreens' pharmacy may have a slight edge now, Amazon's pharmacy segment is growing.
- Staff Shortages: There are not enough employees at Walgreens stores.
- Theft Issues: Many items are locked behind plexiglass, frustrating customers.
- Competition from Amazon Pharmacy: While Walgreens' pharmacy may have a slight edge now, Amazon's pharmacy segment is growing.
Cramer compared Walgreens to Borders, a bookstore chain that went out of business as $Amazon(AMZN.US$ grew. He believes Amazon’s focus on offering the best products at the best prices, delivered conveniently to your home, is a major threat to Walgreens' future.
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