Amazon beat Walmart to lead the US online grocery market in 2017

Amazon sold US$2bn worth of grocery products online in the US last year more than any other retailer according to analytics firm One Click Retail.

The e-commerce giant is expected to have 18% market share in US online grocery sales, double that of its rival Walmart, according to the report. 

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Gaining a bigger market share is a pressing priority for leading retailers as online grocery sales are expected to reach US$100bn in 2025, according to a study by the Food Marketing Institute conducted by Nielson. 

While consumers have been slower to adopt online grocery shopping, preferring to see fresh foods before they buy them, online retailers have increasing persuaded consumers to adapt to the changing industry. 

In Amazon’s case, Amazon Fresh – the e-commerce giant’s grocery delivery service – is helping to drive food sales by selling in-demand “organic” products, encouraging convenience, and targeting young professionals. 

Weekly sales at Amazon Fresh doubled last year, jumping from around US$3mn in January to over US$7mn by the end of the year, to reach an estimated $350mn in total sales. 

Amazon’s US$13.7bn acquisition of Whole Foods also helped the retailer drive growth in 2017.

 Consumer traffic in Whole Foods spiked 35% in the first two days following the acquisition and Amazon Fresh also experiences a strong increase in sales. 

The report noted that some food and beverage categories performed better online than others, with packaged foods, snacks, breakfast foods, and cold beverages seeing significant growth.