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Amazon Grocery is firing on all cylinders according to their recent quarterly report and data collected from One Click Retail. The supermarket giants have been watching Amazon closely over the past few years, but it appears they should watch even closer. In just the first quarter of 2018, Amazon sold an estimated $650 million worth of online groceries. How will traditional grocery compete with Amazon’s rise in the market?
How is Amazon Grocery Growing?
Amazon’s online grocery sales increased by over 50% in the first quarter compared to Q1 in 2017. So how are they doing it? Beverages are currently the top selling items on Amazon. They make up nine of the top ten best-selling grocery products on the site. Coffee represents the most growth in the beverage category with 44% year-over-year sales growth. Cold packaged beverages also represented a large chunk of growth with 40% year-over-year sales. Cold drinks and coffee represented around $285 million of the $650 million in sales in Q1 for Amazon Grocery. Snacks were the next highest performer for Amazon as they had growth of 38% with over $70 million in sales.
How Will Whole Foods Play Into Amazon Grocery Efforts?
While Amazon Pantry and AmazonFresh growth have slowed, the acquisition of Whole Foods last year has everyone in the grocery industry on their heels. Amazon believes Whole Foods can help them get the full shopping basket with perishables like meat, milk, etc. that most consumers want to buy in a store. With Whole Foods and Amazon’s distribution centers, they are slowing rolling out same day shipping to customers around the U.S. A full rollout of this service will completely change the grocery game.
Walmart Will Not Go Down Without a Fight
The biggest challenger for slowing down Amazon Grocery growth is Walmart. They currently offer store pickup at all of their stores and plan to bring grocery delivery to over 100 markets in the U.S. by the end of 2018. Walmart is making it incredibly easy to shop online and then pick up in the store which meshes well with consumer shopping norms.
It will be quite intriguing to watch Walmart and Amazon duke it out over the future of grocery retail. How do you think traditional supermarket chains will compete with these e-retail giants?
Inspired by www.fooddive.com