Last year in 2017, Amazon grocery sales grabbed a market share of 18% of online grocery sales in the US, double the share held by their closest competitor Walmart according to a report by One Click Retail.
The report points out that grocery sales are still largely offline but that Amazon Fresh with their same day delivery is a way that the company is building confidence with consumers. Regardless of consumer’s slowness to move online, Amazon saw 50%+ growth in the US, UK and Germany and One Click Retail suggest this growth trajectory will continue in 2018 due to:
- Amazon’s penetration is at an all-time high in both North America and Europe and it is increasingly valued by young professionals, busy with their careers and/or raising young families, as a one-stop-shop where they can do all of their shopping, including groceries.
- Sign-ups for Prime membership, which includes access to Amazon’s Prime Pantry grocery items, were taking place in record numbers during the 2017 holiday season.
- Amazon Fresh continues to be available to more zip codes throughout the US, UK, Germany, Japan, and soon Australia.
The WholeFoods acquisition gave Amazon a boost in the grocery sector at the end of 2017, customer traffic in Whole Foods locations spiked by 25% in the first two days after the acquisition. According to the report, Wholefoods 365 Everyday Value brand consistently sold as the second bestselling brand among Amazon’s private labels (second only to AmazonBasics) since its launch in late August.
What’s the big deal over Amazon Grocery Sales?
Food is the one thing that we all need and Amazon know that we have to buy it on a frequent basis. Plus of course an Amazon Fresh customer will likely be taking advantages of all the benefits of Amazon Prime, they may own an Amazon Dash or have an Alexa powered Echo device to build shopping lists. This ties customers into the Amazon world and if Amazon can capture a share of a consumers spend on groceries then that customer will almost certainly increase their spend on non-food items. It’s simply good business.