The ASX is facing a big indiscriminate sell-off this morning but the Woolworths Group Ltd (ASX: WOW) share price might have another headache to deal with.

On-line shopping titan Amazon.com, Inc. started selling alcohol online with free delivery for Amazon Prime subscribers, reported Nine News.

The move was to capitalise on strong demand for alcohol during the COVID-19 lockdown with Aussies flocking to online platforms for contactless delivery.

Demerger under a cloud

The launch of alcohol on Amazon poses a fresh challenge to Woolworths on a few fronts. Our supermarket giant is looking to demerge its Endeavour Drinks business, which houses Dan Murphy’s and BWS, among others.

The coronavirus pandemic is complicating the process and news that the world’s largest retailer is muscling in on the lucrative market will cast a further cloud over the demerger.

How prices compare

The drinks sold on Amazon is priced favourably to Dan Murphy’s. According to Nine News, a case of VB beer on Amazon costs $51.90 for 30 cans.

Dan Murphy’s price is a tat cheaper at $51.85 – but Dan Murphy’s charges between $6.90 and $15 for delivery while Amazon’s delivery free with its $6.99 per month Prime subscription.

A case of Jacob’s Creek Double Barrel Chardonnay at Dan Murphy’s is $119.70 plus delivery. Amazon is selling the same for $108 – again with free delivery for Prime members.

Amazon competing with our supermarkets

Woolies shareholders are hanging out for the Endeavour spin-off given that stocks which undertake such a separation tend to outperform the S&P/ASX 200 Index (Index:^AXJO).

But Woolworths is facing more than one battle front with Amazon. Experts believe it’s only a matter of time before Amazon starts selling fresh produce online and in physical stores, just as it’s doing in the US.

It isn’t only Woolworths that is facing the Amazon challenge. Archrival Coles Group Ltd (ASX: COL) is also vulnerable to losing market share to the US retailer, while grocery distributor Metcash Limited (ASX: MTS) is another that will be impacted.

Can ASX supermarket stocks keep outperforming?

These stocks have held up very well through the COVID-19 bear market thanks to their defensive income and the grocery panic buying .

The Metcash share price is up 12.5% since the start of 2020, while the Cole’s share price is ahead by nearly 7% and the Woolworth share price is 2% in the black.

This stands in contract to the 11% loss on the ASX 200.

Shareholders will be hoping they can keep outperforming during these uncertain times even with Amazon nipping at their heels.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. BrenLau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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While the S&P/ASX200 (ASX: XJO) closed down 3.1% on Thursday, gold mining share prices rallied. Among the high-performers were Newcrest Mining Limited (ASX: NCM), Saracen Mineral Holdings Limited (ASX: SAR) and St Barbara Ltd (ASX: SBM).

These company shares have reacted positively to a rising gold price this week. The commodity was up 0.18% on Thursday. In addition, the uncertainty facing markets and the easing restrictions around the world is likely to have added a positive sentiment to gold mining share prices. Gold can be a popular investment during times when economies become volatile, and the current situation appears no different.

While share prices around the world have recovered considerably, the US Federal Reserve flagged concerns about the negative effect of the coronavirus on the US economy. This uncertainty, along with the fact the Federal Reserve will continue printing money, has likely contributed to the current rally for gold miners.

Newcrest Mining

The Newcrest Mining share price rose 5.67% on Thursday and was supported by positive exploration results. Newcrest Mining has been listed on the ASX since 1987 and trades on a fully franked dividend yield of 1.15%. Like most companies, Newcrest has experienced volatility as a result of the coronavirus crisis but its share price has since recovered to above its price at the beginning of 2020.

Saracen Minerals 

The Saracen Minerals share price is up 4.57%, showing a positive reaction to gold prices in line with its peers. Saracen Minerals has two operations in Western Australia and late last year it acquired a 50% stake in the Kalgoorlie Super Pit. Saracen produced a record 355,000 ounces of gold in 2019. The gold mining company’s share price is up 71% from its 52 week low of $2.81. It has risen 45% since the beginning of the year.

St Barbara

The St Barbara share price is up 5.33% at a price of $3.16 at the time of writing. The company provided guidance for the 2020 financial year in a presentation released yesterday. It expects production to be up 6.35% on last year to 385,000 ounces. The gold miner will also be cutting costs at its Western Australia operations. The St Barbara share price is up 22% since this time last year. 

More reading

• S&P quarterly rebalance: A2 Milk added to ASX 50 & NEXTDC in the ASX 100
• 5 things to watch on the ASX 200 on Friday
• Why the Newcrest share price is up today
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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