Amazon saw its fourth-quarter online grocery sales jump 35 percent over the previous four months, according to industry reports.
The online retail giant's Amazon Fresh arm saw sales jump to $135 million in the fourth quarter. The increase comes after Amazon acquired Whole Foods last summer.
One Click retail, a market leader in eCommerce data measurement and sales analytics, says Amazon attained an estimated $2 billion in food and beverage sales, which equates to a market share of 18 percent of the online grocery sales in the United States.
Amazon sold an estimated $11 million of Whole Foods' 365 Everyday Value products in 2017 — including $1.6 million in its first month carrying Whole Foods items — while the company's private-label grocery sales remain small to supermarket chains. Kroger and Albertsons each bring in more than $1 billion in annual sales with natural and organic brands.
According to One Click's report, the key factors driving growth rates higher than 50 percent in Amazon's three biggest markets — the US, UK and Germany — include:
- Amazon's penetration is at an all-time high in both North America and Europe and it is increasingly valued by young professionals, busy with their careers and/or raising young families, as a one-stop-shop for their online shopping, including groceries.
- Sign-ups for Prime membership, which includes access to Amazon's Prime Pantry grocery items, were taking place in record numbers during the 2017 holiday season.
- Amazon Fresh continues to be available to more zip codes throughout the US, UK, Germany, Japan, and soon Australia.
"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," says Spencer Millerberg, CEO at One Click Retail. "The impact has been felt primarily, but not exclusively, in the US. Customer traffic in Whole Foods locations spiked by 25% in the first two days after the acquisition, and Amazon Fresh also experienced a strong increase in sales after the announcement, even before any new products were released on Amazon.com."