Whole Foods is mulling building its kitchen facilities to support its prepared food business, a Wall Street Journal report highlighted. This Amazon (NASDAQ:AMZN)-owned grocer closed its commercial kitchens more than six years ago to reduce costs.
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Whole Foods has been outsourcing its ready-to-eat food production since it closed its regional kitchen facilities. However, the company is focusing on better controlling the quality of its food business by building or buying commercial kitchens.
During the Q4 conference call, AMZN’s CEO, Andrew Jassy, said that the grocery business offers significant growth opportunities. Moreover, its prepared food offerings are essential for driving growth.
Highlighting Whole Foods, Jassy said that the grocer is growing well and made an improvement on the profitability front last year.
Overall, Amazon is taking steps to streamline its costs, especially in its North American operations, to improve its bottom line. The company announced a significant workforce reduction to structure its costs at pre-pandemic levels.
What’s the Prediction for AMZN Stock?
While macro headwinds could hurt AMZN’s near-term prospects, analysts maintain a bullish stance. AMZN stock has 36 Buy and one Sell recommendations for a Strong Buy consensus rating. Analysts’ average price target of $136.64 suggests a 33.88% upside potential.
