Morgan Stanley Names Amazon Top Pick on US Fresh Grocery Expansion

Morgan Stanley has named Amazon a top pick, emphasizing the company's expansion into the fresh grocery and perishables market as a key growth driver. Analyst Brian Nowak projects U.S. off-premise food and beverage spending to reach $1.6 trillion by 2026, with $600 billion attributed to fresh and perishable items, a market nearly as large as Amazon's projected 2026 U.S. gross merchandise value (GMV). Capturing even 1% of this segment could add roughly $6 billion and 120 basis points to Amazon's GMV growth. Amazon's existing logistics infrastructure, including fulfillment centers being retrofitted with cold storage, and its physical store footprint support this expansion's profitability and scalability. Furthermore, deeper consumer behavior insights from fresh grocery purchases could enable Amazon to develop next-generation grocery offerings, strengthening its long-term digital commerce strategy. This fresh grocery push complements Amazon's broader e-commerce dominance and is expected to contribute to multi-year growth and increased operating profit.