We all know that 2022 hasn’t been the kindest year to ASX shares thus far. Even after today’s robust gains on the market, the S&P/ASX 200 Index (ASX: XJO) remains down 5.8% year to date. However, that’s nothing compared to the Xero Limited (ASX: XRO) share price.

Xero shares have certainly not been a market beater in 2022. In fact, while the ASX 200 has lost 5.8% this year, the Xero share price has plunged by a rather astounding 35.99% over 2022 so far. It’s also down 17.24% over the past 12 months.

Xero share price cops a beating

Now, investors may have gotten used to Xero giving back astronomical returns. After all, this is a company that, despite its recent woes, remains up more than 425% over the past 5 years. So what’s changed for Xero?

Well, unfortunately, it’s not exactly clear. We haven’t gotten much news out of the company in 2022. Xero hasn’t even reported any earnings this year.

But what we do know is that Xero is a pre-profit growth share that, prior to this year, had enjoyed some astounding gains. And this company is not the only one of those that has copped a belting this year. 2022 has seen tech shares of all stripes suffer immense losses.

Take Zip Co Ltd (ASX: Z1P). It’s down a far-nastier 64.1% year to date. Before Afterpay was swallowed by Block Inc (ASX: SQ2), it had also had a rough trot. And Block shares have been under the weather as well, losing more than 20% since their ASX debut.

In fact, the entire S&P/ASX All Technology Index (ASX: XTX) remains down more than 23% year to date.

So it’s possible that Xero has just been caught up in a general market distaste for growth and tech companies that has been one of the defining themes of ASX investing so far this year.

But now that Xero is down by a notable 36% or so in 2022, and down an even more significant 40% from the all-time highs we saw late last year, many investors might be wondering if it could be time to buy Xero shares.

Could it be time to buy?

Well, there are more than a few brokers who think it could be. Goldman Sachs, Citi and Morgan Stanley have all rated Xero as a buy in the past month. As have analysts at Sage Capital and even here at The Motley Fool (be sure to check out why Fool analyst Ryan Newman likes Xero).

So there are a lot of fans of this cloud-based accounting software provider at the moment.

At the current Xero share price, this ASX 200 tech share has a market capitalisation of $13.95 billion.

The post Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022 appeared first on The Motley Fool Australia.

More reading

• Why now is a great time to invest in ASX shares (even if you’re fearful of an uncertain world)
• ASX 200 (ASX:XJO) midday update: Elders jumps, Magellan and Zip tumble
• 2 punished ASX shares that don’t deserve to be (and experts are buying)
• Down 14% in a month, why the Pilbara Minerals (ASX:PLS) share price is attractive right now: analyst
• These were the best performing ASX 200 shares last week

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Telstra share price finished in the green today amid speculation it plans to buy a major stake in Fetch TV.

The company’s shares gained 1.56% today and were trading at $3.90 at the market close. In comparison, the  S&P/ASX 200 Index (ASX: XJO) closed 1.2% higher.

Let’s take a look at what might have impacted investor sentiment in the telco today.

Potential new deal

Speculation is mounting Telstra plans to buy a 51% stake in Fetch TV, an independent Australian pay-TV provider offering streaming services via the internet.

According to a report in the Sydney Morning Herald, the telco plans to build a combined platform that can “compete against international companies such as Apple and Google”.

Telstra also holds a 35% stake in pay-TV provider, Foxtel. Fetch TV has coverage in at least 670,000 homes.

Sources told the publication that Telstra and Fetch TV were in advanced talks about a possible deal that could be finalised as soon as the end of March.

Flood assistance

In other news, Telstra has offered $250,000 for communities impacted by the floods in Queensland and New South Wales.

Telstra CEO Andy Penn said in a statement on Friday:

As part of our overall support for flood-affected communities, the Local Flood Grants will provide either cash or technology to the value of up to $10,000 to eligible local organisations.

Our local Telstra teams have been on the ground working around the clock to get communities back online as quickly as possible.

Furthermore, analysts have recently recommended Telstra as a potential dividend share to buy.

As my My Foolish colleague James reported, Morgans predicts a fully franked dividend of 16 cents per share in FY 2022 and FY 2023. The broker has a $4.56 price target on Telstra shares.

Telstra share price ASX recap

The Telstra share price is up 27% over the past 12 months, but shares in the telco have dropped 3% in the past month and are down 6.7% year to date.

For perspective, the benchmark ASX 200 has returned nearly 5% over the past year.

Telstra has a market capitalisation of almost $46 billion based on its current share price.

The post Telstra (ASX:TLS) share price climbs amid rumours the telco plans to take on US giants appeared first on The Motley Fool Australia.

More reading

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• Why was everyone talking about the Telstra (ASX:TLS) share price today?
• Own Telstra shares? Here’s why the telco faces new legal action
• Broker sees 19% upside for Telstra (ASX:TLS) share price and 4% dividend yield

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Novonix Ltd (ASX: NVX) share price finished in the red on Monday, closing at $5.12, down 0.19% on the day.

It’s been a difficult year for Novonix shareholders who have seen their holdings lose more than 44% in value since trading recommenced in 2022.

While the company has struggled, the S&P/ASX All Technology Index (ASX: XTX) has also faltered more than 22% this year so far. However, Novonix is still trailing well behind the broad tech sector over that time.

What’s up with Novonix shares?

The market has punished the battery materials and technology company in recent months with Novonix shares continuing their rapid descent from a high of $10.68 in early January.

At the same time, the broad tech sector has taken a downturn as well. In fact, Novonix tends to track the index quite closely, as shown below.

Not only that, but rising yields on long-dated bonds has resulted in a correction to high-beta and high-growth equities in 2022.

The relationship between bond yields and stock valuations is inversely related, so the rise in yields has compressed ASX tech share valuations this year to date (as shown below).

Hence, with a downturn in the wider sector, this appears to have spilled over into downward pressure on Novonix as well.

Today, the company’s shares traded at near six-month lows on volumes less than 50% of the four-week trading average.

Investors have been piling out of the company since it reported a much larger expenditure base for the first half. Brokers took notice of the blowout too and made note of the company’s capital management.

Last month, Morgans said that Novonix had spent almost $9 million more than the broker’s estimates on operations and that headcount has doubled in its battery testing services division.

As a result of its market forecasts and the likelihood of operating costs increasing again next year, the broker lowered its valuation to $4.88 per share but kept a hold rating on the stock.

Novonix share price snapshot

In the last 12 months, the Novonix share price has shot up around 85% and is leading the benchmark over that time.

However, in the last month alone it has collapsed 22% and is flat over the last five days of trading.

The company has a market capitalisation of $2.4 billion.

The post Why is the Novonix (ASX:NVX) share price down 44% YTD? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• ASX tech shares take a hammering on Friday
• Why is the Novonix (ASX:NVX) share price down 22% in a month?
• Expert explains why this investment opportunity is ‘much bigger’ than hydrogen
• Novonix (ASX:NVX) share price jumps as net assets, cash earnings spike

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Ltd (ASX: CSL) share price closed higher today, finishing 2.37% in the green at $262.62.

The gain comes despite nothing remarkable coming out of the biotech giant’s camp today.

However, the company’s shares jumped from the open, trading as high at $264.17 apiece and as low as $258.53 each during the day.

What happened?

There’s been nothing price-sensitive out of CSL’s corner today. However, it appears that healthcare shares, on the whole, are strengthening this week.

The S&P/ASX 200 Health Care Index (XHJ) gained around 2% from the start of trade today, finishing 1.86% higher.

CSL is also on the rise this week, as illustrated by the chart below.

In a note that bodes well for CSL, analysts at Citi have pointed out potential growth in the blood plasma collection industry.

The broker reckons that CSL’s blood plasma collection volumes could normalise to pre-pandemic levels, which could have a positive impact on the company’s share price.

Currently, more than 87% of brokers covering CSL have it as a buy right now whereas just two firms have it as a hold, according to Bloomberg Intelligence. Indeed, there are no analysts urging clients to sell the company right now.

So what?

Lower bood plasma collections have plagued CSL’s growth engine since late 2020 when volumes took a huge hit amid the COVID-19 pandemic.

CSL is offering some donors incentives in a bid to increase volumes. At the same time, it was reported CSL upped its payment to US donors during the pandemic to entice people to keep their appointments. CSL is one of a handful of blood plasma collection vendors around the world.

Recently, on 10 March, the company advised that it had received clearance in the US for use of the Rika Plasma Donation System developed by Terumo Blood and Cell Technologies.

“CSL Plasma believes additional features of the new Rika system can enable the collection of more plasma, in shorter periods of time, supporting quality and safety, and ultimately better serving patients who rely on plasma-based therapies,” the company said in a statement.

Citi’s rating appears to recognise CSL’s efforts to drive its collection volumes higher.

CSL share price snapshot

In the last 12 months, the CSL share price has climbed almost 4% but is down almost 10% this year to date.

During the past month, things have turned around with the company’s shares gaining almost 6%.

CSL has a market capitalisation of more than $126 billion.

The post Why CSL (ASX: CSL) shares climbed on Monday appeared first on The Motley Fool Australia.

More reading

• Why CSL, Dicker Data, Elders, and Virtus Health shares are charging higher
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Elders jumps, Magellan and Zip tumble
• $20k invested in these ASX shares 10 years ago is now worth…
• The CSL (ASX:CSL) share price has struggled to gain traction in 2022. Does that make it cheap?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX shares drove north today amid a snapback rally that’s been in situ since early March.

The benchmark S&P/ASX 200 Index (ASX: XJO) jumped 1.21% today to 7,149.4 points at the close, its highest level in a week.

There’s no denying a seismic shift has taken place amongst global equity markets when it comes to the themes of environment, sustainability and governance (ESG).

In fact, there’s a whole new investment ‘factor’ that has arisen as a result of the paradigm shift – similar to the value, momentum and growth factors, for example.

However, there are still a number of hurdles ASX shares must overcome in order to cross over to ‘greener’ pastures so to speak, and to which investors must still be aware of the risks involved.

What are the roadblocks?

ASX shares have certainly come a long way since the days when ‘creating shareholder value’ was the primary means and focus of most publicly listed companies.

“However, obstacles that presently prevent some companies and investors from fully utilising sustainable finance remain, which in some cases are impeding further overseas investment into the region”, says Anthony Miller, chief executive of Westpac Institutional Bank.

In the release titled “Financing for Sustainability: Asia Pacific’s evolving ESG market”, the bank manager covers the state of sustainable finance in the region, including the milestones and challenges ahead.

Among these, lack of reliable data is the biggest obstacle for both investors and issuers Miller says, noting that this impedes the ability to measure the impacts of sustainable finance.

“For issuers [of finance], the lack of reliable data to measure the impact of sustainable finance presently ranks as the single biggest obstacle by 25% of respondents”, Miller noted.

This is above the remaining 16% of secondary issues related to transaction costs and insufficient green or sustainable assets, he added.

What else?

Reporting requirements are another thorn in the side of investors and companies alike when it comes to ESG, Miller said, particularly since it is such a novel and new domain.

“In their own jurisdictions, most investors (75%) and issuers (74%) agree that the regulatory and reporting requirements for ESG investments or disclosures in their country are clear”, Miller said.

“Regionally though, 79% of issuers and investors agree or strongly agree that growth of sustainable finance in Asia Pacific will be impeded without regional agreement on regulatory and reporting requirements for corporate climate risk”.

Issues around data aren’t an easy fix, the banking manager also said, particularly as it comes down to factors like classification, taxonomy and specific regulations.

Across the Asia Pacific (APAC) region, approaches differ substantially and this is something that is being looked at in focus. For instance, back in November, the International Sustainability Standards Board (ISSB) announced its plans to develop global sustainability reporting standards for the financial market.

Not only that but all APAC exchanges are required to have ESG disclosures, although there doesn’t appear to be official arrangements across the board. According to Miller:

But significant progress will be required in the near future for the market to reach its full potential and for investors and issuers to be able to access the reliable, comparable information required to make informed investment decisions.

The post 3 roadblocks for ASX shares trying to become greener : Expert appeared first on The Motley Fool Australia.

More reading

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• These 3 ASX 200 shares are topping the volume charts on Monday
• Vulcan (ASX:VUL) investors don’t bite after earnings, shares down 13% YTD
• Neometals (ASX:NMT) shares surge 12% on plans to partner with ‘one of the greatest names in the automobile industry’
• Amazon’s putting a bigger focus on grocery this year

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ampol Ltd (ASX: ALD) share price is in the green today after the company agreed to offload its New Zealand business Gull.

The petroleum company’s shares are currently swapping hands at $28.83, a 2.49% gain.

So what did Ampol announce today?

New agreement

Ampol has entered a binding agreement with Australian investment manager Allegro for the sale of its New Zealand business Gull. This follows a competitive trade sales process, according to the company.

Allegro will acquire 100% of Gull for net cash proceeds of about NZ$509 million. There is also an assumption by Allegro of approximately $63 million of leases and debt-like items.

Ampol plans to use the proceeds of the sale to help fund the acquisition of Z Energy (ASX: ZEL).

In a statement authorised by the Ampol board, the company said:

Ampol committed to divest Gull in full to ensure any potential competition law issues were fully addressed as part of its application to the NZCC for approval to acquire Z Energy.

It is expected the Gull divestment will occur within a prescribed period following completion of the scheme to acquire Z Energy which remains on track to complete in the first half of 2022.

Gull is made up of Ampol Limited, ALD Group Holdings NZ Limited, Gull New Zealand Limited, and Terminals New Zealand Limited. Between them, the companies own a network of 112 service stations, a 91ML fuel import terminal at Mount Maunganui, and six retail properties.

The deal is subject to conditions, including approval from the New Zealand Commerce Commission.

Ampol on the ASX share price snapshot

The Ampol share price has slipped 3% this year to date but has gained almost 21% over the past 12 months.

In the past month, Ampol shares have dropped 9% and are down 4% over the past week.

Ampol has a market capitalisation of about $6.9 billion based on its current share price.

The post Ampol (ASX:ALD) shares higher on sale of its Gull business in NZ appeared first on The Motley Fool Australia.

More reading

• Ampol share price (ASX:ALD) slips despite highest earnings since 2018 and record sales
• 2 ASX 200 shares smashing 52-week highs today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has kicked the week off on a strong footing, recording a gain of 1.06% at the time of writing to just under 7,140 points.

But let’s go a little deeper and check out the ASX 200 shares that are currently at the top of the market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

Whitehaven Coal Ltd (ASX: WHC)

Whitehaven Coal is first up. This ASX 200 energy share currently has had 13.76 million of its shares traded on the markets so far today. There hasn’t been much out of the company itself today, apart from a share buyback notice which could in itself be boosting volumes.

But the Whitehaven share price has had a rather wild time of it today. The company is presently up 0.25% at $4.05 a share, but rose as high as $4.22 earlier today before a sharp plunge after lunch brought it to its current level. This probably explains the high volumes we are seeing.

Incitec Pivot Ltd (ASX: IPL)

ASX 200 fertiliser, chemical and explosives manufacturer Incitec Pivot is next up this Monday. Today so far, we’ve seen a hefty 15.42 million Incitec shares bought and sold. Again, this doesn’t seem to be the result of anything the company itself has released today.

However, the Incitec share price is powering ahead. Incitec shares have added 2.43% so far today at $3.79 a share, well outperforming the broader market. It’s this healthy gain that is probably responsible for the elevated trading we are witnessing.

Nickel Mines Ltd (ASX: NIC)

Our third and final share of the day is ASX 200 nickel miner Nickel Mines. This popular company had had a notable 24.56 million of its shares swap hands thus far this Monday. Unlike Incitec Pivot though, this seems to be the result of a nasty share price fall.

Nickel Mines shares are currently down by a depressing 2.58% at $1.16 each. This could be related to some tough love from a broker this morning, which my Fool colleague James touched on earlier. But it’s probably the size of the selloff that is responsible for the elevated trading that we are seeing.

The post These 3 ASX 200 shares are topping the volume charts on Monday appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Vulcan Energy Resources Ltd (ASX: VUL) are trading in the red on Monday despite no market-sensitive information today.

However, investors don’t appear impressed after the company released its interim report and financial results for the half-year ended 31 December 2021 last week.

Vulcan shares are currently swapping hands at $9.09 apiece, around 4% down on the day.

Vulcan share price slides since earnings release

Key takeaways from the company’s earnings results include:

• Cash and cash equivalents of 134,5 million Euros, up from 70.5 million euros the prior half
• Net assets of 206.4 million euros, a substantial gain from a base of 81.5 million euros 6 months prior
• Revenue from continuing operations came in at 689,999 euros, the first recording
• Net loss after tax (NLAT) of 6.2 million euros, more than 3.6 million euros of June 2021
• Loss per share of 6.52 euros

What else happened this half for Vulcan?

During the half, Vulcan successfully raised $200 million via a placement from existing and new institutional investors. The company notes many of these investors included ESG-focused institutions.

Vulcan also says its chemical engineering team “successfully produced its first battery quality lithium hydroxide monohydrate (LHM) from piloting operations”.

“The plant sample exceeded traditional battery grade LHM product including best on the market battery grade specifications required from offtake customers, at >56.5% LiOH.H2O and with very low impurities”, the company said.

It also noted that it now boasts offtake agreements that are “fully booked for the first 5 years of operation” with names such as Umicore, Stellantis and Volkswagen Group to name a few.

The company also recorded NLAT of more than 6 million euros, whilst printing its first revenue from operations at a total of 690,000 euros for the period.

As a result of the successful capital raising and valuation of its asset base, the company now has a net asset value of 206 million euros.

Management commentary

Speaking on the company’s renewables and geothermal business, Vulcan directorship said:

A significant highlight of the reporting period was the acquisition of the operational geothermal renewable energy power plant in the Upper Rhine Valley at Insheim, Germany (the “Insheim Plant”). The acquisition established Vulcan as a renewable energy producer and is a source of revenue for the Company. The plant currently has the technical ability to produce a maximum of 4.8MW renewable power, equivalent to approximately 8,000 households, with an additional ability to produce heating. The plant is producing 2.9 MW of electricity on average and capitalises on the feed-in tariff for geothermal power.

What’s next for Vulcan?

At the company’s Upper Rhine Valley Project, its team of geological engineering experts continue to increase their understanding of the sub-surface areas, Vulcan says, and that 3D seismic survey-work will be carried out in advance of drilling. Phase 2 drilling for the site is targeted for 2023, it also noted.

Vulcan Energy share price snapshot

The Vulcan Energy share price has soared more than 54% in the past 12 months but is down 13% this year to date.

In the past week, it has lost 4%, however, it is still leading the benchmark index’s return as shown below.

The post Vulcan (ASX:VUL) investors don’t bite after earnings, shares down 13% YTD appeared first on The Motley Fool Australia.

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The Neometals Ltd (ASX: NMT) share price is rocketing today following the company announcing its intention to collaborate with a major automobile maker.

At the time of writing, the advanced materials company’s shares are up 12.59% to $1.655 apiece. They hit an intraday high of $1.77 each this morning.

What’s driving Neometals shares higher?

Investors appear ecstatic with news surrounding the company, sending the Neometals share price well into positive territory.

In a statement today, Neometals advised that Mercedes-Benz AG’s wholly-owned subsidiary Licular plans to cooperate with Primobius. The latter is an incorporated joint venture company owned 50:50 by Neometals and SMS group.

The German automobile powerhouse earlier announced in a media release that Primobius is its preferred technology partner for a proposed battery recycling plant. Plans are underway for the facility to be constructed at Mercedes’ Kuppenheim operations in Southern Germany.

While currently in advanced discussions, both companies are putting the final touches in place for a formal agreement.

The recycling plant is aiming to have a normal recycling capacity of 2,500 tonnes per annum of lithium-ion for Licular’s facilities.

Neometals managing director Chris Reed commented:

We are proud that Mercedes-Benz, one of the greatest names in the automobile industry, has announced its intention to partner with Primobius. Mercedes-Benz has made public its clear commitment towards sustainable battery recycling, with Primobius as its preferred technology partner for the design and construction of an integrated recycling plant in Kuppenheim.

Lithium battery recycling supports conservation of resources, decarbonisation and supply chain resilience and we are excited to assist Mercedes in its goal to re-use recovered materials for the manufacture of new cells for Mercedes-EQ vehicle models.

All of our discussions to date have been very positive and we look forward to continuing our negotiations and entering into binding legal agreements in the near future.

Neometals share price snapshot

Over the past 12 months, the Neometals share price has rocketed by almost 340%.

The company’s shares hit an all-time high of $1.85 in January, before moving in circles thereafter.

Based on today’s price, Neometals presides a market capitalisation of roughly $900 million, with approximately 548.38 million shares on issue.

The post Neometals (ASX:NMT) shares surge 12% on plans to partner with ‘one of the greatest names in the automobile industry’ appeared first on The Motley Fool Australia.

More reading

• Here’s why the Neometals (ASX:NMT) share price surged 6% on Friday
• Neometals (ASX:NMT) share price surges 10% amid dual listing

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) is closing its bookstores and other physical retail locations around the U.S., narrowing its focus to the grocery store segment. This move follows the reopening of Amazon’s first Whole Foods location to incorporate its Just Walk Out technology, which allows shoppers to skip the checkout line.

Grocery has been an area of focus for Amazon for several years — both physical locations and online. But as more grocery shopping moves online — an area Amazon typically dominates — it’s found itself at a disadvantage compared to brick-and-mortar competitors like Walmart (NYSE: WMT). Shifting its physical retail focus toward grocery could help remove distractions and improve its competitiveness.

What’s Amazon giving up?

Amazon currently operates 24 bookstores, 33 “Amazon 4-star” stores, and nine mall pop-up kiosks. It was planning to open 16 more 4-star locations, but plans for those stores have been axed and existing stores will be closed.

Those stores represent a tiny percentage of Amazon’s physical store footprint. It has more than 500 Whole Foods locations and 25 Amazon Fresh stores. Those locations also have a much larger footprint than the other Amazon physical retail formats. Amazon also operates about two dozen small-format Go convenience stores. Those won’t be closed.

Amazon’s physical store segment generated $17 billion in revenue last year. That’s less than 4% of Amazon’s total sales for 2021. So the impact on Amazon’s revenue from shuttering its retail stores will likely have just a small impact on physical retail sales, and it’ll be mostly unnoticeable compared to the overall revenue of the company.

Going after Walmart’s bread and butter — literally

Walmart dominates the U.S. grocery market, holding an 18% share of the overall market and an even bigger share of the online grocery market. What’s more, it’s still beating the competition. On its earnings call last month, management said it grew its grocery market share in the fourth quarter. 

Amazon’s website and Whole Foods locations account for just 2.4% of grocery sales in the U.S. Amazon does much better online. It grew to become a leader in online grocery sales in 2017, but it failed to keep up with the growth of the competition.  

Walmart took a significant share of the growth in online grocery sales in 2020, and it’s created a significant gap between itself and Amazon. Amazon has been able to grow in line with the overall market, maintaining its overall market share, but Walmart has produced excellent results in the space.

The key to Walmart’s success online has been the rapid rollout of curbside pickup and delivery. It offers pickup at 4,600 stores and delivery from 3,500 as of the end of January. Customers responded well to Walmart, which saw some customers shift from shopping for groceries in its stores.

Amazon cannot compete with that level of convenience in every market. Curbside pickup is the preferred method of online grocery ordering for 75% of shoppers, according to a survey from Mercatus. It’s no wonder Walmart continues to take share with its massive store footprint.

Focusing on expanding its physical grocery footprint should allow Amazon to build stores with the omnichannel experience in mind. Stores will be able to fulfill online orders from day one, unlike Walmart, which had to put new processes in place and renovate stores in order to adapt. Moreover, Amazon can provide a better in-store grocery shopping experience by integrating its technology as well as customer perks into the shopping experience. After all, most grocery shopping still happens in stores, and that’s not going to change for a very long time.

Amazon’s biggest advantage is that grocery remains one of the few categories where its market share is relatively small. While Walmart is working to defend its position as the leading grocery retailer, Amazon has a lot of room to take market share and grow quickly. Removing other distractions in its physical retail strategy will help it make the most of the opportunity. And considering U.S. grocery sales totaled $750 billion in 2020, it’s a pretty big opportunity.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon’s putting a bigger focus on grocery this year appeared first on The Motley Fool Australia.

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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. Adam Levy owns Amazon. The Motley Fool owns and recommends Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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