Amazon everywhere: E-commerce titan is topic companies can’t avoid

NEW YORK: What looms over businesses as far flung as car repair, lab equipment and swimming pool gear? In a word, Amazon.

Almost 700 US companies have reported quarterly results so far this earnings season, and the e-commerce titan’s name has popped up on roughly one of every 10 earnings conference calls so far. And the retailers whose lunch has long been eaten by Amazon.com Inc haven’t even reported yet.

In all, Amazon has been raised either in passing or with some urgency on 75 calls hosted by corporate chieftains in the past several weeks, according to a Reuters analysis of call transcripts from components of the S&P 1500. That’s well more than twice as many mentions as Google or its parent Alphabet Inc and over three times as many as Apple Inc.

The preponderance of Amazon mentions by executives and Wall Street analysts is the latest indication of its rapidly expanding reach. Its move last month to buy upscale grocer Whole Foods Market Inc for nearly US$14 billion has added fresh fuel to the concerns.

Once primarily a scourge of traditional brick-and-mortar retailers, Amazon’s cloud over US business has spread to more corners of the economy and raised worries about where it could strike next. Even executives for whom Amazon was not previously a top concern have found themselves responding to questions about how it may burst into their industries.

On the call for 3M Co, which makes everything from scouring pads to stainless steel dental crowns, Amazon was raised by several analysts. Executives at diversified healthcare company Johnson & Johnson were asked how Amazon might pose a risk to its consumer brands.

McDonald’s Corp CEO Stephen Easterbrook declined to respond directly to a question about implications of the Amazon-Whole Foods deal. But he did say: “It just demonstrates how disruptive the business world is and how quickly it moves.”

It was the first time a McDonald’s, 3M or J&J executive had faced an Amazon-related question in an earnings call, according to data from Thomson Reuters dating back to 2000.

“Just that name puts fear even if it’s just a rumor that they might be going into your space,” said Alan Lancz, president of Toledo, Ohio-based investment advisory firm Alan B Lancz & Associates Inc., who has been an investor for more than 30 years. “To be over all these different sectors and all these different spaces, I can’t recall anything like that.”

Not all of the Amazon references reflect worry. In many instances, companies talked up existing and potential partnerships with Amazon, bounties from the recent Amazon Prime Day sale, or opportunities that might stem from a Whole Foods purchase.

But Amazon emerged as a source of analyst concern on conference calls for tire servicer Monro Muffler Brake Inc, swimming pool equipment distributor Pool Corp and water heater maker AO Smith.

“I can tell you that we do think that they’re a force,” Albert Nahmad, chief executive of Watsco Inc, a heating, ventilation and air conditioning system distributor, said in response to a question. “The economy’s never seen anything like it.”

“We keep our eyes on Amazon,” he added.

At issue is the competitive threat from Amazon’s massive size, willingness to sell at low prices and desire to push into a vast array of products or business lines.

In its own quarterly report late on Thursday, Amazon reported a jump in retail sales along with a profit slump, as its rapid, costly expansion into new shopping categories and countries showed no sign of slowing. — Reuters