21 Jul Market Insight – The Disruption in Retail Expands to Grocers: What Amazon’s Latest Game Changer Means for Fixed Income Investors
By Voya Investment Management
The U.S. retail marketplace is in the midst of a revolution, with technology accelerating changes in the way consumers shop and the ensuing fallout ripping through the capital markets. Through the years, Amazon has been at the forefront of these changes, wreaking havoc and taking market share across spending categories. Most recently, the company has taken another step forward with its offer for Whole Foods Market. Perhaps the largest untapped opportunity for e-commerce, groceries have officially joined the ranks of the disrupted consumer-spending categories.
So what are the implications for fixed income markets? As distortions within the apparel category have revealed so dramatically, the value at risk is significant, literally destroying business models that have been in place for decades. We believe the Whole Foods deal represents a game changer in that same sense, albeit with varying degrees of value at risk across fixed income markets. While the disruption will likely take years to play out and new dynamics will continue to emerge, the current perspectives of Voya fixed income team follow.