Amazon.com Inc.’s online grocery sales grew 59% in the United States last year and are expanding nearly as fast in the United Kingdom and Germany, according to an analysis from retail analytics firm One Click Retail.
Amazon’s market share of U.S. online grocery sales in 2017 was 18%, double the share held by its closest competitor, Wal-Mart Stores Inc., One Click Retail says.
The firm estimates that Amazon generated $2 billion in food and beverage sales in 2017, up 59% from 2016. Amazon’s German grocery sales were totaled 200 million euros in 2017 (about $245 million), up 54% year over year. In the U.K. Amazon’s grocery sales totaled about 150 million pounds (about $209 million), up 56%. Those figures include only Amazon’s direct sales and not those of its marketplace sellers.
Amazon’s growth in the U.S. grocery market is due, in part, to the addition of the house brands the e-commerce giant gained when it acquired Whole Foods. Since its launch on Amazon.com in late August, One Click Retail says, Whole Foods’ 365 Everyday Value brand has been Amazon’s second best-selling private-label brand, after AmazonBasics. Sales of 365 Everyday Value brands on Amazon.com are estimated at $11 million for 2017.
In its first week on Amazon.com, more than 90% of the roughly 2,000 365 Everyday Value products listed on Amazon sold out. One Click Retail says that implies the impact on Amazon’s sales could have been even greater if Amazon had been better prepared for the popularity the brand.
“The biggest growth driver of late 2017, which will inevitably have a major influence on sales well into 2018 and beyond, is Amazon’s acquisition of Whole Foods,” said Spencer Millerberg, CEO of One Click Retail. “The impact has been felt primarily, but not exclusively, in the U.S.”
Amazon announced its acquisition of Whole Foods last June and the deal closed in August. Customer traffic in Whole Foods bricks-and-mortar locations grew 25% during the first two days after Amazon’s takeover, according to Foursquare Labs Inc., which compared shoppers’ smartphone location information before and after the acquisition.
In the United States, One Click Retail says Amazon, No. 1 in the Internet Retailer 2017 Top 500, generated $350 million in its top-selling grocery category, cold beverages, in 2017. That was up 65% from the previous year. The next-highest sellers were coffee, at $325 million (up 34% from 2016); snack foods, $150 million (up 53%); breakfast foods, $150 million (up 38%); and candy/gum, $125 million (up 35%).
In Germany and the U.K., One Click Retail says, Amazon’s top-selling—and fastest-growing—category was beer, wine and spirits. In Germany, Amazon’s sales of those items were up 230%, while in the U.K. they were up 96%.
While non-perishables dominate Amazon’s U.S. grocery sales, One Click Retail says Amazon’s sales in each of its top fresh-food categories were in eight digits. Amazon’s fresh-food sales were led by dairy products, at $85 million. That was followed by meat ($50 million), frozen foods ($45 million), fresh vegetables ($40 million) and fresh fruit ($40 million).
One Click Retail says weekly sales for Amazon Fresh, Amazon’s grocery delivery business, more than doubled during 2017, climbing from about $3 million in January to more than $7 million by the end of 2017, and total sales for Amazon Fresh were $350 million for the year.
Online grocery purchases have been slow to take hold for many reasons, including consumers’ desire to touch and smell fresh produce before buying it. Only 4.5% of shoppers frequently bought groceries online in 2016, said Kurt Jetta, CEO of TABS Analytics, a consumer products research firm.
However, food is fast becoming one of the hottest areas of online retailing in the United States and abroad.
Worldwide, online sales of fast-moving consumer goods (FMCG)—the kinds of low-cost products typically sold in grocery stores—grew 30% in the 12 months ended in March 2017 and now account for 4.6% of global FMCG sales, up from 4.4% a year earlier, according to a recent report from consumer research firm Kantar Worldpanel.
In the United States, Kantar says, e-commerce sales of FMCG are expected to grow to 8% of the total by 2025, representing $90 billion in online sales. Kantar attributes the projected growth to increasing rollouts of in-store pickup of online orders among grocery chains here.
Favorite