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Walmart and Target will 'survive' against Amazon, says O'Leary

CNBC logo CNBC 7/10/2018 Kellie Ell

  • Investor and author Kevin O'Leary says Walmart and Target are "making all the right tactical moves."
  • Walmart announces plans to open a fulfillment center for its subsidiary Jet.com in the Bronx, New York.

AmazonAMZN may have a run for its money with big-box retail chains WalmartWMT and TargetTGT, investor and author Kevin O'Leary told CNBC.

"If you look at behemoth big boxes that are going to survive the next decade against Amazon, I would put Walmart in that basket, along with Target," O'Leary said Tuesday on "Closing Bell." "Because if you look at what they’re doing and the kind of people they’re hiring on their teams and the efforts and the logistics they’re putting in place, they look like survivors to me."

His comments come on the heels of Walmart's announcement Tuesday that its subsidiary Jet.com will open a fulfillment center in the Bronx, as Walmart tests same-day grocery delivery in New York.

Walmart is investing heavily in its grocery business, something O'Leary said "everybody expects them to do" in order to compete with e-commerce giant Amazon.

In March, Walmart said it would expand its online grocery delivery service to around 800 stores by the end of the year.

"Making moves like this with distribution centers that can provide hourly delivery and large metropolitan areas, that’s part of the game plan," O'Leary said on Tuesday.

Kevin O'Leary wearing a suit and tie© Provided by CNBC

The investor, who co-founded O'Leary Funds, said companies such as Walmart and Target don't have the "insane" price-to-earnings ratio "but they’re making all the right tactical moves."

Amazon could not be reached for comment.

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