Amazon makes sales gains in grocery: Report

Amazon’s grocery sales grew by nearly 50% in the first quarter of 2018, and consumers are starting to view the e-commerce giant like any other grocery store, according to a report from One Click Retail.

Amazon’s grocery sales saw an increase of more than US$200 million during the period, recording a total US$650 million, with particularly strong performance in coffee and cold beverages. What’s also interesting, is that milk and cream is one of the fastest-growing subcategories: 152% year over year. With that subcategory joining such other household staples as shortening and oil, baking mixes and salad dressings, perishables, once a typically avoided e-commerce sector, may now be seen as acceptable for online delivery – at least from the Seattle-based company.

“The growth of milk and cream signals a long-awaited shift in consumer behaviour,” the report says. “Consumers are becoming less selective about what groceries they’re buying online and are beginning to treat Amazon just like any other grocery store.”

Breaking them down, Amazon’s top-selling U.S. categories in Q1 include:

• Coffee, with year-over-year sales gains of 44%, which earned more than $145 million during the period


• Cold beverages, with year-over-year sales gains of 40%, which earned more than $140 million during the period


• Snack foods, with year-over-year sales gains of 38%, which earned more than $70 million during the period


• Breakfast foods, with year-over-year sales gains of 26%, which earned more than $50 million during the period


• Baking, with year-over-year sales gains of 46%, which earned more than $45 million during the period

Not doing as well is Amazon Prime Pantry, which saw year-over-year growth fall to 14% in Q1. The Prime-member-exclusive service, which packages everyday CPGs into a single box delivered for a flat fee of $6, recently was repurposed as a subscription service that costs $5 a month and exists separately from Prime. While its sales were estimated at $55 million last quarter – hardly insignificant – because it isn't growing as fast as the rest of grocery e-commerce, Amazon is trying to make the service more profitable for the company and more attractive to consumers.

This isn’t the first program adjustment for groceries that Amazon has made this year. In February, the e-commerce giant merged its Prime Now super-fast delivery service with its grocery delivery service Amazon Fresh--two programs that delivered consumables but through different models and fees. The move was intended to possibly help streamline delivery via Whole Foods, which is available in certain markets throughout the U.S.

A version of this article appeared at ProgressiveGrocer.com.