Amazon’s grocery sales booming after Whole Foods acquisition
Following Amazon’s acquisition of Whole Foods, which was finalized last summer, its sales of fresh seafood and other perishable items jumped, research firm OneClickRetail said in a new report.
Whole Foods’ private-label line, in particular, has benefitted Amazon’s overall grocery sales. Amazon sold an estimated USD 11 million (EUR 9 million) of Whole Foods' 365 Everyday Value natural and organic products, which includes seafood items such as frozen fish sticks and canned albacore tuna, the research firm found.
Customer traffic in Whole Foods locations spiked 25 percent in the first two days after the acquisition, and AmazonFresh also experienced a strong increase in sales after the announcement, even before any new products were released on Amazon.com, OneClickRetail said.
“In reality, the impact could have been even greater if Amazon had been better prepared for the popularity of the Whole Foods brand 365 Everyday Value, which in the first week sold out of over 90 percent of the roughly 2,000 products listed on Amazon,” OneClickRetail said. “Despite these shortages, 365 Everyday Value still consistently sold as the No. 2 bestselling brand among Amazon’s private labels (second only to AmazonBasics) since its launch in late August.”
Meanwhile, Amazon’s overall estimated grocery sales jumped 59 percent to USD 2 billion (EUR 1.6 billion) in the U.S. in 2017, OneClickRetail said, with AmazonFresh’s U.S. sales reaching USD 350 million (EUR 287 million). And Amazon’s total grocery sales to the United Kingdom also soared 56 percent to an estimated GBP 1 million (USD 1.4 million, EUR 1.1 million) in 2017.
The Amazon and Whole Foods partnership is a “perfect match,” which strengthens the campaign begun by AmazonFresh to change consumer perceptions of online grocery sales from non-perishables only to high-quality, fresh, “whole”-some foods, OneClickRetail said.
“For brands, this will have – and already has had – widespread implications, with food sales moving online in record volumes as consumer confidence soars,” the research firm said. “The growth potential for online sales of groceries in 2018, and fresh foods in particular, is huge. In all likelihood, this is the tipping point we have been waiting for.”
In the U.S., total online grocery sales account for less than three percent of the estimated USD 800 billion (EUR 655 billion) grocery market, but analysts expect that share to grow into the double digits over the next five years, MarketWatch reported.