ECOMMERCE

Amazon rings up $500,000 in grocery sales in one week following Whole Foods Market deal

BY Deena M. Amato-McCoy

It only took seven days for Amazon to begin reaping the benefits of its acquisition of Whole Foods Market.

On its first day as the official owner of the natural foods grocer, Amazon made more than 2,000 items from the Whole Foods 365 Everyday Value line available online in the United States. By the end of the first week, sales across Amazon’s Pantry, Fresh and Prime services rang up $500,00 in total sales — nothing was sold on Amazon.com, according to One Click Retail. The firm has been closely monitoring Amazon’s sales data since announcing in June its plan to acquire Whole Foods for $13.7 billion. Amazon officially took over on August 28.

“Having all items posted and available online as of day one is just incredible,” Spencer Millerberg, One Click Retail’s CEO told Chain Store Age.

“There has been a lot of press about how Amazon is lowering prices at Whole Foods, but the rate that this company listed all of these items online is just as impressive,” he said. “Typically, this type of execution can take between six and 12 months. They had it ready on day one.”

Eighty-nine percent (89%) of food categories and 11% of non-food categories comprised the first week’s sales. The top selling items across all three platforms were water, canned beans, coconut water and tomato paste.

Specifically, snacks and candy contributed to 21% of sales, followed by frozen fruits and vegetables (10%). Beverages and canned goods comprised 9%, respectively, followed by frozen meals (7%), and condiments and dressings (6%). Baking and spices, and dairy and eggs rang up 5% of sales, respectively, followed by nutrition and wellness, and health and personal care (4%, each), One Click reported.

“All other food” categories contributed to 17% of sales. This demand indicates that Amazon shoppers are hungry for new categories, including more fresh options.

“Amazon didn't anticipate the significant impact that Whole Foods could bring to its fresh offerings,” Millerberg explained.

“Whether it is access to produce, lunch meat or other fresh merchandise, it is obvious that Amazon shoppers are hungry for the fresh value that Whole Foods can bring to the table,” he added. “Amazon needs to stay astute with a limited assortment that will make a huge impact among the shopper. But now it has the opportunity to keep more fresh foods flowing through the pipeline.”

According to data from Foursquare Labs, Whole Foods hit another milestone during week one — customer traffic swelled by 25% immediately after the takeover, according to Bloomberg.

The unprecedented demand that Amazon experienced during its first week as the grocer’s official owner did have one downside. Inventory was limited, and 93% of the top 100 selling items were out-of-stock by the end of the week. This negatively impacted sales for week two, which took a 38% dive, the company reported.

Millerberg also questions how this demand will impact the future of Whole Foods’ value proposition. “Amazon’s consumers are attracted to ‘everyday basics,’ while Whole Foods caters to the ‘upper echelon’ of goods,” he said. “It will be interesting to see if this trend continues and if it weighs down the value proposition of Whole Foods.”

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P.Donahue says:
Sep-19-2017 10:30 pm

Amazon rings up $500,000 in grocery sales ......
It should be noted that an above average grocery store does approximately $500,000 per week. ONE STORE does that amount of volume per week. There are over 30,000 conventional grocery stores in the US. Is Amazon related to the Kardashians?

Jim Thompson says:
Sep-13-2017 07:21 pm

Alternate headline - Amazon struggles with grocery operations
As one might expect, the Amazon take-over was a mixed bag in the first two weeks. On the negative side, significant operational issues hurt sales "93% of the top 100 selling items were out-of-stock" "This negatively impacted sales for week two, which took a 38% dive" On the other hand, at least for week one, Whole Foods received a fantastic bump from the acquisition "Whole Foods hit another milestone during week one — customer traffic swelled by 25% immediately"

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MARKETING/SOCIAL MEDIA

Target pairs associates with digital experts in ‘innovation sprint’

BY Marianne Wilson

Target Corp. has kicked off a partnership with BCG Digital Ventures to conduct a 14-week “innovation sprint.” For the project, BCG's experts (including designers, engineers and investors) are working side-by-side with five Target associates to develop new growth concepts and ideas. (The associates are middle managers from across Target's various divisions, reported the Star Tribune.)

In a blog on its website, Target said the goal of the project was to tap its team’s skills and experience "to explore new and compelling business cases that are natural extensions of our brand and expertise, and support Target’s strategic priorities."

The Target associates are working out of Digital Ventures' centers in New York and Los Angeles. Currently, they have been split into groups doing customer behavior research in six cities. Each group has a mix of Target and Digital Ventures team members, ranging from ethnographers to venture capital investors, product managers to designers, engineers to growth specialists, and more, the retailer said.

New products and businesses that come out of the project will be designed to address the needs of Target’s shoppers now and well into the future, the company said.

"This is a unique partnership with tremendous potential — and we’re excited about the passion, inventiveness and entrepreneurial commitment being brought to bear from Target and Digital Ventures,” said Anthony Koithra, partner, BCG Digital Ventures.

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News

Report: Walmart reorganizing U.S. store ops

BY Marianne Wilson

Walmart is simplifying its U.S. business as it looks to respond more quickly to the accelerating pace of change in the retail industry.

The discounter is consolidating its six divisional groups into four and its 44 U.S. regional groups to 36, reported Bloomberg.

“Our last field restructure was several years ago and our business has changed over that time,” spokesman Kory Lundberg said in a statement to Bloomberg. “The structure we are putting in place will help improve communication and execution, streamline decision-making and help us accelerate our pace of change.”

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J.Ponting says:
Oct-04-2017 07:27 am

Nice Post.
Nice Post.

M.Brandley says:
Sep-13-2017 10:39 am

walmart.
since they have already announced a store closing under "does not fit Business model" in Minnesota by end of October this is the companies new way of saying more store closings are coming. they stated the lease was expiring and where not going to renew it

B.Lackey says:
Sep-12-2017 08:55 pm

Walmart's big mistake
Walmart should never have withdrawn the price matching from competitors. I shop much LESS at Walmart now because of this.

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