Amazon’s Grocery Push Keeps Stumbling After Whole Foods Purchase
(Bloomberg) -- Amazon.com Inc. continues to struggle in the $840 billion grocery market, more than a year after it spooked the industry with the $13.7 billion acquisition of Whole Foods.
The number of Amazon Prime members who shop for groceries at least once a month declined in 2018 compared with 2017, according to the results of an annual consumer survey released Wednesday by UBS analysts. The drop was surprising given the company’s Whole Foods investment and expansion of two hour delivery service Prime Now, the analysts wrote in a note to investors.
A separate study by research firm Brick Meets Click found that households using grocery delivery and pickup services from physical retailers spend about $200 per month and place orders more frequently than Amazon grocery shoppers, who spend $74 a month.
The number of households with access to online grocery delivery and pickup options will reach 90 percent next year, up from 69 percent in 2017, thanks to big investments by food retailers of all sizes, the report states. That makes Amazon’s grocery delivery services fairly common, according to David Bishop, a partner at Brick Meets Click.
Amazon, through a spokeswoman, declined to comment.
Amazon gained more than 400 stores -- and spooked the industry -- with its Whole Foods acquisition, which came after a decade of grocery delivery experiments failed to gain significant traction. Walmart Inc., Kroger Co. and Target Corp. responded by rolling out delivery and in-store pickup options. They have an advantage over Amazon because they have more stores, putting them closer to shoppers, Bishop said.
"Fear motivates more than hope and these retailers all scrambled to respond," he said.
©2018 Bloomberg L.P.