|Bid||31.61 x 1000|
|Ask||31.85 x 1300|
|Day's range||31.73 - 32.21|
|52-week range||19.99 - 34.00|
|Beta (5Y monthly)||1.01|
|PE ratio (TTM)||20.39|
|Earnings date||06 Aug 2020 - 10 Aug 2020|
|Forward dividend & yield||1.60 (5.03%)|
|Ex-dividend date||28 May 2020|
|1y target est||31.63|
Americans still plan to attend or host a cookout this 4th of July weekend as the U.S. reported a record-setting 53,000 new coronavirus cases.
Cooking from home may be here to stay even after the worst of the COVID-19 pandemic. McCormick CEO Lawrence Kurzius chats with Yahoo Finance.
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Kraft Heinz (KHC) closed at $32.13 in the latest trading session, marking a -0.83% move from the prior day.
(Bloomberg) -- The obvious obstacles in America’s food-supply chain -- from shuttered meat plants to restocking delays and panic buying -- have largely dissipated. But shock waves remain.There are millions of pigs that need to get processed fast, before their weights become too burdensome, or farmers will be forced to euthanize the animals. Meanwhile, food sellers like pizza maker Papa John’s International Inc. and Campbell Soup Co. had to bulk up on extra ingredients to avoid further disruption. Kraft Heinz Co., the giant that makes ketchup and cream cheese, had to expand its lists of usual suppliers for some items, while livestock-feed makers were forced to reformulate rations.Take the case of Tyler Beaver, the 31-year-old founder of brokerage Beaf Cattle Co., who helps connects farmers and ranchers with buyers for their animals. Even though meat plants owned by giants like Smithfield Foods Inc. and Tyson Foods Inc. are mostly running again, he’s still busy dealing with a backlog of animals after coronavirus outbreaks shuttered slaughterhouses in April and May.“It will take a long time before things get back to normal,” he said.Beaver is connecting farmers to wholesale buyers that sell pigs to individuals instead of meat companies. The efforts are “helping and we are doing good, but they are still having to cull a lot of pigs every day,” he said. In the last few months, Americans have experienced food shortages in ways the country hasn’t seen for decades. It was shocking for consumers to walk into grocery stores and not find the overflowing shelves they’d come to take for granted. Even Wendy’s Co. dropped burgers from some menus. Many analysts and experts dubbed the supply chain as broken.But the U.S. food system wasn’t developed by accident. It’s a complex and interconnected web that thrives on huge economies of scale, allowing everything from dairy to meat to vegetables to be produced quickly and efficiently. The problem is, the industry has become so intertwined that any hiccup can trigger a series of domino effects.The cascade of unexpected impacts forced the largest food companies to rethink their usual production methods.Kraft Heinz had to seek out new sources of carbon dioxide, used in refrigeration. That was a knock-on effect from ethanol plants shutting. Beer makers also were left without the C02, a biofuel bydproduct they use to make their beverages fizz.“It was an unexpected outcome of this crisis,” said Kraft Chief Procurement Officer Marcos Eloi.Shortfalls at grocery stores along with concerns for worker health have sparked calls for production to be carried out on a smaller scale and through more localized markets. The answer may not be that simple. Consumer prices would certainly increase in that type of production system, and eliminating economies of scale would also do away with the efficiencies that have been built to make food quickly and with less waste.“There’s a lot of big companies that produce a lot, and what’s not obvious to people is that you need those sorts of economies of scale to produce affordable food,” said Jayson Lusk, head of agricultural economics at Purdue University. “People are talking about smaller, regional scale, but would some sort of food system like this be more resilient to the type of shocks we’ve seen? I don’t think so. No system can respond that quickly to that type of demand shock.”Companies are working to avoid futures disruptions.Campbell Soup, the maker of Goldfish crackers and Pacific broths, and snack-bar producer Bobo’s are buying more ingredients to maintain production in case supply lines get disrupted again.They’re also preparing for impacts from unexpected places.Ripples from the ethanol industry, for example, have had a sharp impact on food companies. As nationwide lockdowns kept people off the roads, demand for the biofuel tumbled and some of the industry’s largest and most efficient production sites were forced to shut down.Ethanol is mostly made from corn in the U.S. When production halted, farmers were left with few options but to stash their grain. Meanwhile, output of a key biofuel byproduct, distiller dried grains, slumped. Livestock producers use the product as an ingredient in rations for cattle and dairy cows.The dislocation resulted in “mass reformulations” of animal feed, David Hoogmoed, president of the Purina Animal Nutrition unit of Land O’ Lakes Inc., said earlier this year.CO2 ShortfallsMeanwhile, Kraft Heinz faced shortages of carbon dioxide in California. That forced the company, which uses CO2 in some 13 U.S. operations, to get creative, sourcing from Midwest suppliers and shipping it to the West Coast, said Eloi.“It does cost more, and as you know at the end of the day, it’s not only CO2,” he said. “The impact of CO2 was minimal compared to the overall scenario that we are facing.”Port closures in China earlier in the year also pushed Kraft to start sourcing apple juice from Chile for its Capri Sun brand, while a huge increase in at-home eating sent demand for navy beans in the U.K. soaring. To ensure shelves are stocked, Kraft has asked its suppliers in the U.S. and Canada to plant more of the beans and is planning to start shipping earlier in the season.“Some of these changes maybe are going to stay, some will not, so we need to make sure that we have the agility to change,” Eloi said.There are also ripple effects from the food system onto other industries. For example, makers of aluminum can sheets have seen demand gain as people drank more at home.“They’re now back to growing at about 5% to 6% a year, so they could get back to the all time high potentially this year or early next year,” said Greg Wittbecker, an analyst at CRU Group.The changes made in food production over the past few months, and the industry’s ability to adapt quickly could likely prove useful in a potential second wave of coronavirus infections.“I’m hopeful we’ll be better prepared, if for no other reasons we have a better understanding of the science about the spread of the disease and populations who are vulnerable,” said Lusk of Purdue.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The Federal Reserve realizes that it doesn’t have to buy U.S. corporate bonds, right?I ask this question only somewhat in jest. In a surprise move, the central bank announced Monday that it would start to buy individual company bonds under its $250 billion Secondary Market Corporate Credit Facility, specifically by following a diversified index of U.S. corporate bonds created expressly for its program. “This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity and other criteria,” the Fed said in a statement. Notably, issuers of bonds acquired through this program don’t need to provide certifications, unlike the stipulations for individual debt purchases. It’s not immediately clear why this is necessary, nor how this will impact markets any differently than the facility’s current purchases of exchange-traded funds. So far, the secondary-market vehicle has bought about $5.5 billion of ETFs. As my Bloomberg Opinion colleague Tim Duy quipped on Twitter, it’s as if policy makers said “we want to expand beyond ETFs, so we will purchase individual bonds such that we mimic an ETF.”Predictably, the largest investment-grade bond ETF, ticker LQD, surged in the wake of the announcement to its biggest intraday gain since April 9. That was the day the Fed changed the parameters of its credit facilities to allow for purchases of high-yield ETFs and debt from fallen angels that were investment grade as of March 22.The most surprising part of this is there is virtually no evidence that the corporate-bond market needs this kind of intervention — it has been working nearly flawlessly for months. Sure, the credit ratings of several brand-name companies have been lowered since Covid-19 started to spread across America in March. Some even fell into junk, like Ford Motor Corp., Kraft Heinz Co. and Macy’s Inc. For countless others, their business model has radically changed for at least the next several months, if not years.And yet the average yield demanded by investors for investment grade debt fell last week to just 2.23%. On March 6, the rate was 2.22%, the lowest ever in Bloomberg Barclays data going back to 1972. On that day, the benchmark 10-year Treasury yield tumbled as much as 25 basis points to a record low and closed at 0.76%, while investment-grade bond spreads widened to 144 basis points in what was the credit market’s worst day in a decade. By contrast to those volatile bouts, the move lower in corporate yields during the past few weeks could be described as nothing short of orderly, with average all-in rates falling or staying constant for 21 consecutive trading sessions through June 10 and never dropping by more than 9 basis points at a time.One reason for this type of indexed buying might be that the central bank is worried about the overall leverage levels of corporate America. A Fed report released last week showed U.S. nonfinancial business debt, which includes bank loans and corporate bonds, increased in the first quarter by the most in records dating back to 1952. Firms added $754.8 billion of debt, equivalent to an 18.8% annualized rate, in the first three months of the year. Now with $16.8 trillion of borrowing, nonfinancial corporations have more debt outstanding than all American households.At first glance, that seems rather obvious. That time frame roughly coincides with companies rushing to raise cash and stave off imminent liquidity problems as the coronavirus crisis reached a zenith. But the first quarter also included a period of about two weeks in late February and early March in which the U.S. corporate bond markets were closed in the primary market’s longest drought since July 2018. In total, investment-grade companies borrowed about $479 billion in the first three months of the year, according to data compiled by Bloomberg. In April and May alone, they combined to issue more than $528 billion of debt. While this month isn’t shaping up to be quite as busy, companies reeling from the pandemic like Delta Air Lines Inc. and Royal Caribbean Cruises Ltd. have been lured back to the bond market, given the favorable conditions. All this has happened, of course, without the Fed’s credit facilities purchasing a single bond. Private investors have been more than willing to pick up the slack, pouring $14.6 billion into funds that buy U.S. investment-grade debt, high-yield bonds and leveraged loans in the week that ended June 10, the second-highest inflow on record behind the $15.6 billion added in the week ended June 3, according to data from Refinitiv Lipper.The weeks of record inflows make the Fed’s rush into corporate bonds all the more puzzling. As it stands, the facility will stop purchases no later than Sept. 30, “unless the Facility is extended” by the Fed and Treasury Department. That’s a huge caveat. Why not save the firepower for when — or if — it’s needed? Especially with so much extra room to go in buying ETFs?According to Bloomberg News’s Christopher Condon and Craig Torres, the Fed built the index internally, and a spokesman couldn’t immediately say whether its details would be made public. The central bank added that it could slow or even pause purchases if market functioning showed sustained improvement.I’m not sure what more the Fed wants to see. Obviously, corporate executives have been happily reaping the benefits from the wide-open primary market and locking in rock-bottom interest rates. Now with the central bank in play as well, expect investment-grade yields to soon set record lows.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Kraft Heinz (KHC) is benefitting from its robust pricing and product-development efforts. Also, the company's enterprise transformation strategies bode well.
(Bloomberg Opinion) -- Warren Buffett says “nothing can stop America.” To put his money where his mouth is and spend some of his $137 billion stash before this crisis is over, he wouldn’t have to look far. If there’s one company that warrants the dealmaker’s attention, it may be Costco Wholesale Corp., a retailer in which Buffett’s Berkshire Hathaway Inc. already owns a stake. At Berkshire’s virtual shareholder meeting last month, Buffett signaled that the Covid-19 pandemic hasn’t afforded him deal opportunities at bargain-basement prices the way past economic meltdowns have. Despite the nationwide shutdowns that are just starting to lift and a soaring unemployment rate, the S&P 500 Index is only 8% off its February all-time high. That’s partly due to aggressive actions taken by the Federal Reserve to mitigate the crisis, though one can’t deny that there exists an astonishing disconnect between stock prices and the economic realities of many Americans right now.Costco wouldn’t be a typical crisis-era bet for Buffett in this regard. The shares are up, not down, this year and its operations have carried on throughout the pandemic. Zoom, Netflix, TikTok, Costco — the retailer is right up there with those services that have become centerpieces of the stay-at-home recession.But in so many other ways a Costco deal would still be classic Buffett. For starters, Buffett already likes Costco. Berkshire has owned the stock for two decades; its 1% stake is valued at about $1.3 billion currently. Buffett’s business partner Charlie Munger, the 96-year-old vice chairman of Berkshire Hathaway, also sits on Costco’s board. Last year, Buffett even publicly marveled at Costco’s in-house Kirkland brand, which at that point had $39 billion of annual sales. “Here’s somebody like Costco, establishes a brand called Kirkland and it’s doing $39 billion — more than virtually any food company,” including Kraft Heinz Co., he said. Berkshire is Kraft Heinz’s largest shareholder.Costco has proven during this crisis that it has a durable brand and a wide competitive moat, two of the key attributes Buffett looks for. More than 90% of Costco’s U.S. club members renew, and globally the rate is nearly as high at 88%. Those warehouse memberships are a predictable source of cash flow, almost akin to Berkshire’s insurance float that Buffett uses to invest. While the majority of Costco’s 787 warehouse clubs are in the U.S. and Canada, it does have locations in Mexico, the U.K., Japan, South Korea, Taiwan and Australia. It’s also expanding in China, offering Buffett exposure to the country’s growing middle class.Costco’s same-store sales have risen 6.5% on average for the last 10 quarters, topping other U.S. mass retailers including Walmart Inc., the parent of Sam’s Club. Costco also generated more than $1,300 of sales per square foot in fiscal 2019 — more than any of its peers.The share price has gotten a bump from all the panic-shopping, and at 34 times earnings, Costco’s valuation certainly isn’t what Buffett would call cheap. But Costco should continue to fare well in a post-virus America, especially if it leads some residents to ditch cities for suburbs and spend more time at home. After the meat and toilet paper shortages, more shoppers may even turn to bulk-buying to be better prepared for future lockdowns or shortages.The biggest hurdle to a takeover is that Costco’s market value is $137 billion — precisely the amount of cash Berkshire has available. Berkshire’s last major acquisition was Precision Castparts, a maker of airplane engine parts, for $37 billion in 2016. After years spent searching for his next target, Buffett signaled recently that his hunt is on hold, suggesting that he thinks the crisis could still get worse before it gets better. “The cash position isn’t that huge when I look at the worst-case possibilities,” he told a stunned audience last month that tuned into the livestreamed annual meeting expecting to hear something a little more upbeat or at least hopeful from the Oracle of Omaha.(1)Berkshire could simply increase its stake in Costco, a stable holding that pays a 70-cent quarterly dividend. But it wasn’t all that long ago that Buffett spoke of the possibility of an acquisition Costco’s size. “If a $100 billion deal came along that Charlie [Munger] and I really liked, we’d get it done,” he said in May 2018. With Buffett set to turn 90 in August, it would be uncharacteristic to not want to do one last splashy transaction.It also wouldn’t be the first time Berkshire acquired one of its stock holdings. Berkshire owned shares in Precision Castparts before that deal. It also took a stake in the BNSF railroad in 2007 and kept adding to that position until it eventually purchased the whole company. Berkshire’s ownership of Geico even dates back to the 1950s when Buffett first bought shares and as a curious young investor began a serendipitous friendship with the insurer’s former CEO, Lorimer Davidson, as Buffett often retells it.Whether as a takeover candidate or stock pick, Buffett’s best option may be right under his nose. (1) One well-known shareholder, Bill Ackman’s Pershing Square Capital Management, even exited its Berkshire position, deciding itcan find worthwhile investing opportunities faster than Berkshire can at this rate.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The amount of new debt issued this year in the U.S. investment-grade corporate bond market will reach $1 trillion today, by far the fastest pace in history. The implications of that milestone depend on how you look at it.For businesses that had been ravaged by the coronavirus pandemic and the ensuing nationwide lockdowns, access to capital markets was a lifeline to get through the worst of the economic collapse. Sure, Carnival Corp. had to offer interest rates like a junk-rated borrower and Boeing Co. needed to include a so-called coupon step-up provision to offset jitters that it could lose its investment grades. But, in the words of Federal Reserve Chair Jerome Powell, these deals avoided turning “liquidity problems into solvency problems” for brand-name American companies.It’s worth remembering that until the Fed stepped in with extraordinary support for credit markets, averting widespread failures was far from guaranteed. Investors pulled a staggering $35.6 billion and $38 billion from investment-grade funds in the weeks ended March 18 and March 25, respectively. Before 2020, the previous record was $5.1 billion of outflows. I wrote on March 19 that bond markets were veering into a vicious cycle that could get ugly in a hurry — four days later, the Fed announced what would end up becoming a $750 billion backstop for corporate America.Now, the Fed hasn’t actually had to buy any individual bonds yet, a fact that Powell seems proud to share. “We may have to be lending money to those companies, but even better, they can borrow themselves now, and a lot of that has been happening and that’s a really good thing,” he said during May 19 testimony before the Senate Banking Committee.Most people would probably agree with that assessment, at least for the immediate future as the country grapples with restarting the world’s largest economy. But what about the longer-term view?Here, the rampant borrowing paints a more sobering picture. As of late April, 1,287 issuers worldwide rated between AAA and B- by S&P Global Ratings were considered at risk of a potential downgrade, up from 860 in March and 649 in February. That surpasses the previous all-time high set in 2009. “Generally, we expect heavy credit erosion in coming months as issuers, especially those in the lower-rated spectrum come under heavy fire from poor earnings, continued difficulties in managing cost structures, and market volatility creating limited funding opportunities,” said Sudeep Kesh, head of S&P’s credit markets research.That’s bad enough, but doesn’t even strike at the heart of the issue. Last year was supposed to be the beginning of a broad “debt diet” among companies that borrowed huge sums to finance mergers and acquisitions during the longest expansion in U.S. history. That didn’t end up taking place on a wide scale. Even a success story like AT&T Inc., which made headway in trimming its debt stack, still found itself back in the bond market recently, borrowing $12.5 billion on May 21 in what was the biggest deal since Boeing’s $25 billion blockbuster offering.When it comes to companies directly impacted by the coronavirus pandemic or structural changes to their industries, the “big three” of S&P, Moody’s Investors Service and Fitch Ratings haven’t shied away from taking action. Ford Motor Co., Kraft Heinz Co., Macy’s Inc. and Occidental Petroleum Corp. are just a few of the “fallen angels” that lost their investment grades earlier this year.The rating companies haven’t been quite as keen to react to high leverage metrics. I frequently refer back to this feature from Bloomberg News’s Molly Smith and Christopher Cannon, which found that of the 50 biggest corporate acquisitions in the five years through October 2018, more than half of the acquiring companies increased their leverage to a level that would seemingly merit a junk rating but remained investment grade on the assumption that they’d take that leverage down in the coming years. Those expectations seemed ambitious in 2018, when the economy was seemingly invincible. Now, no one can truly expect companies to focus on right-sizing their debt. Corporate leaders are rightfully eager to raise cash to get to the other side of the pandemic, especially with all-in yields not far off from record lows. The vast majority of the $1 trillion in borrowing so far this year was by no means imprudent.In the years ahead, however, the overhang from this issuance spree will inevitably weigh down credit ratings. A company with more debt presents a greater risk of missed interest payments than if it had fewer fixed obligations. Fortunately, for much of the previous expansion, firms had no issue finding investors willing to buy their long-term securities. That practice of rolling over debt and extending maturities might very well be the norm in the months and years ahead, too. Still, if the first five months of 2020 are any indication, investment-grade bondholders will have to get comfortable with even more bloated balance sheets and the prospect of further credit downgrades. For better or worse, with the confidence that the Fed has their back, that seems like a risk investors are willing to take.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Kimberly-Clark (KMB) has been witnessing higher consumer demand for its products amid the coronavirus outbreak. Also, the company's cost-saving efforts are yielding results.
As many on Wall Street were running for the exits in March, some of the best investors in the world, including Seth Klarman, Bill Ackman, David Einhorn, and Bruce Berkowitz, were scooping up deals. Here's why they saw value in Facebook (NASDAQ: FB), Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), and Kraft Heinz (NASDAQ: KHC) during the recent bear market.
The world's most legendary investor doesn't exactly heed one of the most embraced tenets of building a portfolio.
The Kraft Heinz Company (NASDAQ:KHC) shareholders should be happy to see the share price up 13% in the last quarter...
Kraft Heinz (NASDAQ: KHC) has generally been an underperforming stock in recent years, yet on Monday it closed nearly 6% higher. Bank of America analyst Bryan Spillane now believes Kraft Heinz is a buy, with a new price target of $38 per share. Kraft Heinz stands to benefit from dramatic changes in the consumer landscape in the wake of the coronavirus pandemic.
Kraft Heinz (NASDAQ: KHC) is attracting more positive investor sentiment. The stock just received an upgrade from a Bank of America analyst, who sees a good chance that shares will rise to $38 in the near term.
The Kraft Heinz Company ("Kraft Heinz") (Nasdaq: KHC) today announced the early tender results of the previously announced offer by its 100% owned operating subsidiary Kraft Heinz Foods Company (the "Issuer") to purchase for cash (the "Tender Offer") any validly tendered (and not subsequently validly withdrawn) notes up to a combined aggregate purchase price (excluding accrued and unpaid interest) of $2.2 billion (the "Maximum Tender Amount") of its outstanding Floating Rate Senior Notes due February 2021 (the "February 2021 Notes"), 3.500% Senior Notes due June 2022 (the "June 2022 Notes"), 3.500% Senior Notes due July 2022 (the "July 2022 Notes"), Floating Rate Senior Notes due August 2022 (the "August 2022 Notes"), 4.000% Senior Notes due June 2023 (the "June 2023 Notes"), 3.950% Senior Notes due July 2025 (the "July 2025 Notes") and 3.000% Senior Notes due June 2026 (the "June 2026 Notes," and together with the February 2021 Notes, the June 2022 Notes, the July 2022 Notes, the August 2022 Notes, the June 2023 Notes and the July 2025 Notes, the "Notes" and each, a "Series" of Notes). Kraft Heinz also announced that, with respect to the Notes validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on May 15, 2020 (the "Early Tender Time"), the Issuer will elect to make payment for such Notes on May 19, 2020 (the "Early Settlement Date").
Hostess Brands CEO Andy Callahan tells Yahoo Finance people continue to fill their pantries with donuts and Twinkies amidst the COVID-19 pandemic.
Fasten your meatbelts, NASCAR fans! Not only is NASCAR returning, but the iconic duo, Oscar Mayer and driver Ryan Newman, are back on the track at Darlington Raceway on Sunday, May 17.
(Bloomberg) -- Amazon.com Inc. says the one- and two-day delivery times that shoppers have come to expect should gradually return in coming weeks as the online retailer catches up from a demand surge tied to the coronavirus outbreak.The company on Sunday lifted restrictions on the amount of inventory its suppliers can send to Amazon warehouses and is shortening delivery times -- which had stretched for weeks for some products since the outbreak began -- back to days. The shares rose 2.1% to $2,406 at 10:42 a.m. on Wednesday.Amazon spends months preparing for the surge in consumer demand that usually comes during the holiday season. The Covid-19 outbreak that closed many retail brick-and-mortar stores and sent millions of shoppers online created a month’s worth of Black Friday spending without warning. Once Amazon fell behind, it took several weeks and hiring 175,000 people to get back on track.“We removed quantity limits on products our suppliers can send to our fulfillment centers,” Amazon spokeswoman Kristen Kish said in an email. “We continue to adhere to extensive health and safety measures to protect our associates as they pick, pack and ship products to customers, and are improving delivery speeds across our store.”Even with the delays, Amazon saw a major spike in sales tied to the coronavirus outbreak because shoppers had so few choices. Amazon, big box stores, supermarkets and pharmacies were among the few businesses deemed essential and allowed to remain open. But the delays were starting to tarnish Amazon’s reputation with its customers and its merchants who supply more than half the goods sold on the site.Quick delivery is central to Amazon’s customer promise, helping it attract more than 100 million people who pay monthly or yearly dues for Prime memberships. Prime members spend more on the site than non-Prime members, making it critical for Amazon to get its delivery times back to normal especially as retail stores begin reopening and shoppers have more options.When Seattle-based Amazon was overwhelmed in April, many shoppers saw the long delivery times and shifted their purchases to pickup curbside options offered by Walmart Inc. and Target Corp., said Anthony Ferry, chief executive officer of PriceSpider, which tracks web traffic for more than 1,600 brands, including consumer staples made by Procter & Gamble Co. and Kraft Heinz Co.“Loyal Amazon shoppers left the site when they saw long delivery times or items were out of stock,” he said. “Buy-online pickup-in store has become a much more enticing and desirable solution when people want something now.”Amazon let employees worried about their safety take time off during the outbreak, which increased absenteeism and aggravated the delays. Some lawmakers, unions and workers have criticized Amazon for not doing enough to protect its warehouse workers and continuing deliveries through the pandemic. Company officials have said repeatedly they have taken multiple steps, including extensive cleaning at facilities, to keep its employees healthy.Long delivery times were beginning to erode Amazon’s stellar brand reputation among consumers, said Juozas Kaziukenas, founder of the New York research firm Marketplace Pulse that monitors the site. Shoppers left 800,000 negative reviews on Amazon’s shopping site in April, double the number in the same month a year ago, with much of the increase attributable to longer delivery times, he said.“Amazon is known for great selection, low prices and fast shipping,” Kaziukenas said. “These all broke during the pandemic. Selection was not always there, prices were not lowest because Amazon sold out, and fast shipping was gone.”Even Amazon’s merchants, many of whom rely on the company to store, pack and ship their products through the Fulfillment By Amazon logistics service, started doing things themselves to quicken the pace of deliveries.Bellroy has been selling wallets, smartphone cases and laptop sleeves on Amazon for seven years and used Fulfillment By Amazon because quick delivery is popular with coveted Prime members. But by the end of March, delivery times for many of its products were as long as 30 days and sales plummeted. Amazon was prioritizing essential items. So Bellroy began packing and shipping many of its products itself, and now does the logistics for about 20% of its sales on Amazon, said Lina Calabria, co-founder and chief operating officer of the company.“When you go to Amazon and see 30-day shipping, our brand is getting mixed in with Amazon’s problems and we don’t want our customers to have a disappointing experience,” she said. ”It seems like we’ve accidentally developed a new strategy for Amazon.”By again reducing its delivery times, Amazon will cut the risk of more merchants defecting from its logistics service, which generated about $14.5 billion, or 19% of its total revenue, in the first quarter. Many sellers are simply waiting for Amazon to clear the delivery clog, said James Thomson, a former Amazon employee who helps merchants sell products on the site through his consulting firm Buy Box Experts.“It doesn’t matter if I advertise on Facebook or Google and redirect people to my site and offer faster delivery than Amazon,” he said. “The biggest problem for a lot of merchants is shoppers just don’t want their products right now.”(Updates with shares in second paragaph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.