Amazon Wants To Feed You, For A Fee

Amazon is stepping up its Fresh delivery service to include brick-and-mortar convenience stores and drive-through grocery shopping. Amazon isn’t commenting directly about this project, but the Wall Street Journal and other new sources are reporting that Amazon is set to open a brick-and-mortar convenience grocery store in Seattle. If all goes well,the model could extend to other cities. This is another example of Amazon exploring new consumer delivery options. At times, it seems they are throwing everything on a wall and seeing what will stick while consumers foot the bill for the company’s experiments. It is a brilliant business strategy.


Back in 2007, Amazon started Amazon Fresh. For the membership price of $299 a year, customers could order perishable goods like produce and have it delivered. The service hasn’t really taken off, but rather than abandon it entirely, Amazon seems to have doubled down. Now the company is placing its bets on a brick-and-mortar store that offers quick pickup of items. Since the grocery industry relies on warehouses, refrigeration and other overhead costs, efficient delivery is difficult, as is the need to maintain an irregular inventory of goods. This could be why Amazon is turning to traditional brick-and-mortar locations and adjusting its pricing strategy. But, it is doubtful that Amazon’s foray into non-virtual convenience stores is a permanent business model. Instead of a bet, it is more like a well-funded stepping stone.


Instead of offering Amazon Fresh for $299 a year, Amazon Prime customers can add Amazon Fresh to their membership for $15 per month. These recurring payments can help Amazon keep its grocery arm flush while it explores the best way to deliver goods. With the future of drone delivery hitting obstacles, Amazon can maintain a presence in the grocery delivery business through drive-through convenience stores and brick-and-mortar locations. This presence might only be temporary. Once drone delivery and other supply chain issues are resolved, Amazon might return to what it does best, efficient online ordering and fulfillment without ever once dropping from consumer consciousness.

Costco Dominates Brick and Mortar Sales

With recent reports and analysis about Amazon Prime’s popularity and dominance cutting in to Target and Walmart sales, Costco has largely remained out of the discussion. One reason, as pointed out by finance reporter Grace L. Williams, is Costco’s free samples and loyal customers. This might seem petty, but Williams makes some good observations which are backed by market numbers.


First, Costco’s numbers are strong and the company still has room for growth, particularly overseas. Next, although more Costco members are also Prime members, they use the different sellers’ services for different reasons. While Prime offers speed and convenience, Costco offers an experience. A trip to Costco might suck up a good portion of a weekend, but the experience of getting one’s hands on goods, and the opportunity to sample offerings is an experience that an online company is incapable of providing. Plus, while Amazon still receives a good portion of activity during the holiday season when consumers are especially concerned about prices and savings, Costco is a steady supplier of necessities throughout the year. Plus, Costco membership is cheaper and considered a good value.


One number worth noting is the percentage of small business owners who renew their Costco memberships, 94 percent. The number of non-business owners is still strong, at 88 percent. But the high number of small business renewals, and the fact that these owners spend 20 to 30 percent more than non-small business consumers at Costco, indicates that Costco is beating Amazon on that front. Costco is a unique niche as a wholesale retailer. Small businesses owners have come to rely on the store as a part of their supply chain, a position that can’t be filled by Amazon Prime or Target. Furthermore, a drone can only carry so many rolls of paper towels.

Continued Success of OSI Group

The OSI Group has been in business for a long time. They are a company that provides food to people who need it and to people who come from different areas of life. They are able to provide food to people around the world and they always use their expertise to make sure that their clients are happy with the food options that they have. OSI Group are a globally recognized leader in the way that food is handled and in the food service industry and they have worked hard to make sure that they keep their appearance up and are able to claim that title.

They started out as only a small meat market with a name that was much different than OSI Group. They were run only by family and they made sure that they made choices that were great for their family. It has been something that they have always done and something that they feel comfortable with when they are in the big business. It has been the continued family atmosphere of the OSI Group that has allowed them to be as successful as possible in everything that they set out to do in the food service industry.

Not only will they provide their clients with the best of the best when it comes to food but they will also give them everything that they need to be able to successfully prepare that food on They want their clients to have everything that they need to get started and they know that their clients will be better for it when they make the decision to buy food from them. They also want their clients to know that they can help them if they need it when it comes to the food that they sell and how to prepare it.

Along with the food that they offer that is able to cook, they also offer ready to eat options for their clients who want to be able to market the food as a simple solution. OSI Group work hard to make their ready to eat products as delicious as their fresh food and their other food options that they have that clients can prepare. This gives them the chance to be a part of something completely different than what some of their competitors do while they are working the food industry.

While they have been extremely successful with the opportunities that they have already conquered, they plan to do even more. They want to be even more recognizable and want to be the leader in everything that they do since that will determine the ultimate success. They plan to take their business even further into the industry and they want to make sure that their clients get the best of everything. Since going global, they plan to provide even more options for their clients that will suit the needs of different markets around the world. They are going to be a company that encompasses every aspect of food in every corner of the world.

Are Hedge Fund Managers Running Out Of Ideas?

It is not comforting to think of hedge fund managers running out of ideas about what to do with investor money. The whole purpose of hedge funds is to spread money out and diversify it among a variety of different investments. In fact, the purpose is somewhat to put the money into things that the investor would not otherwise be able to invest in. This is why it is so concerning to see what some hedge funds are doing right now.

The latest report from Business Insider details how some well known hedge funds such as Baupost Group are putting their investors money to work in large banking institutions. What is wrong with this? You may ask yourself. The primary issue here is simply a lack of creativity.

Yes, large investments banks such as Morgan Stanley and Citigroup (two of the banks that many hedge funds are currently investing in) often do diversify their own holdings among alternative and traditional investments. However, the purpose of hedge funds is not to ride on the coattails of what the investment banks are doing. In fact, the idea is to try to beat the returns that the market is giving.

It seems like with some hedge funds lining up to put their money into investment banks that they have simply run out of fresh ideas about where to store investor’s money in the first place. It is a surprising move considering how often hedge funds typically try to avoid such conventional wisdom. Some believe that this points to the idea that some of these hedge funds may be truly out of ideas. If that is the case, then what is about to happen in the market next? It is anyone’s guess, but no one likes to see hedge funds floundering.

Hain Celestial Is Taking A Dive After Accounting Probe Revealed

Those holding shares of Hain Food Celestial company surely did not like to see the news headlines that came out today. The shares have plunged after it was revealed that the company is conducting an internal accounting probe. The company dropped around 27% of its value just today as a result of this news.

Business Insider reports on the story noting that the company is looking to see if it accounted for concessions that it received were accounted for in the right time period. It is possible that there was a double accounting of these concessions or that some other accounting irregularities may be in play.

There are independent committee members which are review the situation with outside lawyers. It would appear that the company is doing everything that it possibly can to make sure that this audit process is handled properly and professionally. That being said, investors tend to not like to have an uncertainty when it comes to where they are putting their money to work. As a result, it is not entirely surprising to see how much the stock has been beaten up because of this news.

Another factor weighing on the company right now is the fact that it announced that it does not expect to meet its sales guidance for 2016. Though the miss is small, it is yet another factor pointing towards some potential long term issues at the firm. Investors are fleeing the stock with all of this bad news baked into it at the moment. It may be a while before those same investors are willing to give this company a second chance if they ever do again.

Goldman Sachs CEO Shares Important Advice

There are few authorities in the world of finance with as much command of the facts as Goldman Sachs CEO Lloyd Blankfein. The things that he has to say about the markets and money are listened to closely by those who would like to gain some insight about what they also should be doing.

In an interview with CNBC said that if he could give advice to his 20 year old self now, he would tell that person to “chill out”. He knows that this is easier advice to give at his age now than it is to take when you are 20 years old, but he still hopes that there is someone out there who will hear his words and benefit from them.

He believes that there is a lot of value to taking things slowly and not trying to do too much at once. As a young person this can be difficult to do. The young see the world only as it is today and often do not spend a lot of time thinking about the future. However, it is only when one really plans out the future well that they can rely on having a more comfortable path ahead for them.

Blankfein also noted that a lot of young people today compare themselves to their peers or those they read about in the news. He points out that this is unproductive because there are plenty of people who take all kinds of different paths to success. There is not just one right way to do things. He hopes that young people recognize this and that they are able to adapt to whatever circumstances life throws there way. Many fail multiple times before they find the right path for them.

Saving Instead Of Spending Confuses Corporate America

The majority of consumers are now choosing to save money instead of spend money. This trend has baffled corporate America who is seeing their profits decline in the second quarter. For example, Target has seen sales in its stores decrease by about 1.1% since the last quarter. Its stock also declined by about 6% recently as well. CEOs all across corporate America have gloomy outlooks as they expect consumers to continue to save instead of spend.

So why are people choosing to save instead of spend? At the heart of this lies the financial crisis or Great Recession. Since the financial crisis hit, the percentage of people saving instead of spending has increased dramatically. The number of people saving reached a peak in 2010, then dropped off in 2012. However since 2013 and onward, the number of people saving is increasing yet again and that trend looks to continue. The number of people saving is at the highest level since 2001. This is clearly a trend that has corporate America worried.

Since the financial crisis people are much more cautious. They want to build up a reserve of money to be prepared for an economic meltdown. Economists and those at corporate America have forecasted that as employment has increased and people’s incomes have risen since the recession that people will spend more. The opposite has occurred. People are now saving more, because they want to have a nest egg of money in case the economy tanks again.

On a different tangent, corporate America is also seeing greater competition from online retailers such as Amazon. Membership based services such as Netflix are also eating into corporate profits. Consumers are moving away from shopping at malls and instead are buying things online and enrolling in membership based services.

Target Stores Struggle To Sell Groceries

It seems like a pretty obvious move for Target stores to be involved in the grocery selling business. Their primary rival Wal-Mart is already in that space and they seem to do quite well in it. As a matter of fact, Wal-Mart has pulled away a respectable chunk of the market share in the grocery business since it first got involved many years ago. So why is it not working so well for Target and more importantly what can it do to change that?

A Different Type Of Customer

One of the roadblocks that Target faces is simply that it serves a different type of customer than Wal-Mart. While Wal-Mart is all about the very bottom basement prices that it can possibly offer to its customers, Target has a more nuanced approach. The people who shop there are not necessarily always looking for the absolute cheapest price, they often want something that has a little more quality. As such, customers may not be there to do their grocery shopping but instead look at the other merchandise that Target sells.

Selling Alternative Groceries

Even though a lot of Target customers are not currently looking to shop for groceries (the same groceries they could probably get at Wal-Mart at a lower price), that could change if Target makes some changes.

A Huffington Post article offers the helpful suggestion that perhaps more customers would be interested in what Target has to offer if they were willing to sell some things that other stores do not tough. For example, if the store sold “ugly produce” it might be able to do so at lower prices and attract more customers.

This is produce which has not yet spoiled but which does not appear as pretty as its neighbors. Although the food is still perfectly edible, many customers only want to purchase it at a lower price. Target could offer this to try to attract those who are a little more budget aware.

Greater Competition Between Sellers On Amazon Leads To Less Sales Growth

Channel Retailer, a company which helps firms sell their goods online is reporting that year over year sales are decreasing substantially on Amazon. A small increase in January has been followed by consecutive months of a decrease in the year over year sales growth. In July the year over year sales growth was a mere 6.4% growth at Amazon. This is in stark contrast to an increase of 30.1% in July of 2015.

So what explains the decline in year over year sales growth month after month for retailers selling through Amazon? The primary factor driving this decrease in growth is the greater amount of competition many companies now face when selling there. Amazon has seen a great number of third party sellers now competing with established firms.

The greater competition cuts into the market share of the companies already there. This explains the decrease in year over year sales growth. Increased competition also leads to lower prices. When a new competitor arrives they may lower their price in order to gain customers. This leads to existing companies having to lower their price in order to remain competitive.

Greater competition and lower prices is what is driving the sales growth down on Amazon for many companies. The flip side to this is that consumers like me and you can benefit from the lower prices by buying goods at cheaper prices. The goods could also be higher quality as companies compete more heavily for customers.

EBay too is seeing a sharp increase in competition in online sales. However, when you take Amazon and eBay out of the equation, year over year sales growth for many companies is actually quite strong with a percent in the amount of 50% growth. If you are looking for good deals online eBay and Amazon may be your best bet right now.

Subrime Loaning Is On The Rise

Subprime loaning is seeing a major spike. What is subprime loaning or a subprime loan? Generally, it is giving a loan or credit to someone who is unworthy of it. Subprime loans are considered to be very risky and carry a greater than average rate of default. Subprime mortgages were one of the major causes of the housing collapse and the economic recession of 2008.

TransUnion, one of the major credit reporting agencies has found that the number of subprime borrowers has increased by almost a percentage point since last year. According to TransUnion, someone who is considered a subprime borrower will have a credit score below 660. Such as score is considered to be below average.

Another interesting statistic is that subprime balances are increasing instead of decreasing. TransUnion’s 2nd quarter report found that subprime borrowers are seeing their balance increase by an average of 14%. People who have higher credit scores, in other words non sub prime borrowers are seeing a reduction in their credit card balance on the other hand.

Is the trend of increasing subprime loaning of concern? The answer to this is yes and no. You will always have subprime borrowers. They are typically charged a higher interest rate to make up for the greater risk lenders take to offer them credit. The delinquency rate for subprime borrowers remains flat at around 11%. This means that bankruptcies or non repayment of loans by subprime borrowers is not increasing.

If the number of subprime borrowers increases significantly than this could be a sign of economic trouble and another bubble. The total number of credit card balances is increasing and so is the number of users. However, as long as the percentage of subprime balances and delinquency remains relatively low and stable, there is no major economic fears to be had.