Amazon's food and beverage sales gained a boost after it grabbed more grocery turnover in 2017 through sales of Whole Food Markets 365 private label, while a major Amazon grocery move is predicted in Germany and possibly for Whole Foods in Australia.
Amazon’s grocery division reported growth of more than 50 per cent in its three major markets in 2017. Sales in the US were around USD2 billion, fuelling growth in the wider US logistics chain with sales up 59 percent, while sales in the UK (GBP150m) and Germany (EUR200m) posted 56 percent and 54 percent growth respectively.
According to Europe-based LZ Retailytics intelligence, when Amazon Germany's boss Ralf Kleber was asked whether there were any plans to operate physical stores in Germany he said, "the question is not if but when". Retailytics said the move will most likely come through the acquisition of an existing food chain, instead of introducing a new format itself.
Retailytics believes the only such chains are Denn's, Alnatura, Bio Company and Basic, the latter being a perfect fit, as its struggling the most in terms of sales growth.
Amazon, which opened in Australia late November, faces barriers to grocery delivery similar to Canada due to spread out cities. A Deutsche Bank annual 'Battle for Baskets' survey of 2,400 Australians found a third of shoppers who currently get groceries online said they wouldn't buy from Amazon.
And Amazon renewed its Whole Foods trademark in Australia, while earlier in May 2017, it registered its checkout-free store, Amazon Go, with IP Australia.
In the US, Whole Food Markets 365 private label brand items such as dark chocolate, coconut water and frozen blueberries helped Amazon.com grab more grocery sales in 2017, following the merger of WFM into Amazon. This helped push sales at Amazon’s online grocery-delivery service, AmazonFresh, up 35 percent in December.
Whole Foods said that its favourite WFM products on Amazon were: "Whole Foods Market’s 365 Everyday Value, high-quality private label products became available through Prime Pantry and Prime Now in August. Top-selling items for snacking and baking this holiday season through Prime Pantry and Prime Now include the 365 Everyday Value Organic Dark Chocolate with Coconut (3 ounce), 365 Everyday Value Organic Crunchy Pretzel Sticks, 365 Everyday Value Four Cheese Thin Crust Pizza and 365 Everyday Value Organic Fruit Strips, among others."
The products are available through Amazon.com, including the ecommerce service’s Amazon Fresh, Prime Pantry and Prime Now.
Whole Foods saw the highest sales of turkeys and sweet potatoes ever across its operations in 2017. The news follows several waves of price discounts on select grocery staples, including holiday essentials.
Meanwhile, Whole Foods Market's customers in the US took to social media late January and complained about empty shelves in grocery aisles across the US as WFM employees blamed food shortages on a recently implemented inventory management system known as order-to-shelf.
“Last week, we ran out of onions and potatoes twice,” an employee of a Brooklyn Whole Foods store said. “Entire aisles are empty at times.” “It has for weeks had empty shelves, and I shop there twice a week,” one customer told US Business Insider. “The prepared-food section is not refreshed, and food looks stale.”
Business Insider said that order-to-shelf is a “pretty old practice of the distributor replenishing the inventory at the retailer,” quoting Fangruo Chen, a professor at the Columbia Business School who studies supply chain management.