Revealed: 10 ASX shares that could get crushed by Amazon

Amazon's arrival into Australia is going to put these businesses under enormous pressure.

a woman

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There has been a lot of speculation about Amazon Inc.'s arrival into Australia and it's not hard to see why this would have a lot of Australian retailers worried.

Anyone who has looked at the online retailer's U.S-based website will see quickly that nearly every retail category is pretty well covered.

Although Australian consumers won't have the full range of categories initially, you can be pretty sure that Amazon will look to expand its range fairly quickly if it can develop a fast and efficient method to ship products across the country.

As a result, I think it is important that investors take some time to understand which Australian retailers might be most exposed to the threat from Amazon.

With that in mind, here are the 10 ASX retailers that I think will be most heavily impacted by the arrival of Amazon:

Company Market Cap Annual Sales Retail Categories/Segments at Risk
Wesfarmers Ltd (ASX:WES)
$49.8 billion $67 billion Supermarket groceries, Target, Kmart, home improvement, Officeworks
Woolworths Limited (ASX: WOW)
$34.3 billion $59 billion Supermarket groceries and household goods, BIG W
Metcash Limited (ASX: MTS) $2.1 billion $13.2 billion Groceries, household goods, home improvement
Harvey Norman Holdings Limited (ASX: HVN) $4.6 billion $7.7 billion Technology and electronics, small home appliances, home décor
JB Hi-Fi Limited (ASX: JBH) $2.8 billion $5.6 billion Fast moving electronics, small home appliances, DVDs, music
Myer Holdings Ltd (ASX: MYR) $912 million $2.8 billion Apparel, homewares, general merchandise
Super Retail Group Ltd (ASX: SUL) $1.9 billion $2.6 billion Sporting equipment, outdoor and leisure goods, auto care
Premier Investments Limited (ASX: PMV) $2.2 billion $1.2 billion Fashion and apparel
Reject Shop Ltd (ASX: TRS) $123 million $850 million Discount consumer goods, homewares
RCG Corporation Ltd (ASX: RCG)
$483 million $600 million  Athletic clothing and footwear

Companies like JB Hi-Fi, RCG and Premier Investments have done a good job of growing their sales and profits recently, but this will become a much tougher task when Amazon arrives in full force.

There is also the possibility of margin contraction as local retailers lower their prices and range more items in an attempt to maintain their market share.

Foolish takeaway

Amazon will need some time to establish its operations in Australia and this means investors don't need to rush out and sell their retail shares immediately.

However, the longer term impact from Amazon is likely to be substantial and investors should take this into account when making a long term investment decision.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Premier Investments Limited and Super Retail Group Limited. Motley Fool contributor Christopher Georges owns shares of RCG Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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