Numerator: Amazon has a 3% US grocery market share including branded stores and Whole Foods; UBS: physical stores accounted for ~90% of US grocery sales in 2022
Amazon is still barely scratching the surface of the grocery market despite years of efforts. Tweets: @alephblog and @carlquintanilla Tweets: David Merkel / @alephblog : Amazon hasn't taken over your refrigerator yet. But it's still trying. https://www.wsj.com/... Interesting that Walmart does 6x the grocery business of Amazon. $WMT $AMZN Also note that general merchandizers sell more than 50% of all groceries. Carl Quintanilla / @carlquintanilla : “.. Amazon has been dabbling in the grocery business for years .. Still, to really crack the grocery market, Amazon needs a bigger physical store footprint. .. That explains why Mr. Bezos' successor is looking to kick things up a notch.” @WSJ $AMZN https://www.wsj.com/...
Context & Ripple Effects
This is the latest scorecard on Amazon's longest-running expansion flop. Back in early 2022, CNBC reported the company's grocery strategy was unprofitable and incoherent after billions spent over 15 years, with Amazon and Whole Foods holding an estimated 2.4% US share in December. The new Numerator figure — roughly 3% including branded stores and Whole Foods — shows barely a year of movement.
The structural reason sits in UBS's number: physical stores still accounted for ~90% of US grocery sales in 2022, and per the tweet commentary Walmart does six times Amazon's grocery business while general merchandisers sell more than half of all groceries. That echoes Benedict Evans' earlier sizing of Amazon at ~35% of US ecommerce but only ~6% of addressable US retail — dominant online, peripheral in the aisles.
First-order effects
- Amazon's grocery push remains marginal where it matters most: with ~90% of grocery sales happening in physical stores, its 3% share means the Whole Foods acquisition has not translated into mass-market grocery presence, and Walmart's grocery lead stands at roughly six times Amazon's business.
- The finding hands Amazon's critics a concrete benchmark — share up only fractionally from the 2.4% estimated in late 2021 — putting pressure on management to justify continued grocery investment.
Second-order effects
- Grocers who spent 2019 experimenting with smart carts, dynamic price tags and automated warehouses under the Amazon-threat narrative face less urgency to defend against a competitor stuck at 3%, shifting their innovation calculus toward cost discipline rather than defensive tech spending.
- To grow at all, Amazon must add physical footprint — consistent with its later move to test grocery formats that pull Whole Foods and Amazon Fresh fulfillment into a common delivery platform, which treats stores as nodes in a logistics network rather than standalone retail.
Third-order effects
- If the pattern holds, US grocery consolidates around whoever owns physical locations — general merchandisers like Walmart already selling over half of groceries — while pure ecommerce scale fails to transfer, reinforcing the Evans thesis that Amazon's antitrust profile looks far weaker offline than online.
- Amazon's path likely runs through hybridizing grocery: using its fulfillment software layer across acquired store networks rather than out-competing incumbents on shelf presence, making grocery another case where logistics infrastructure, not brand or app traffic, decides market share.
The trend: US retail's biggest ecommerce player keeps failing to convert digital dominance into grocery share because the category remains structurally physical — and Amazon's answer is to turn stores into fulfillment nodes rather than beat grocers at merchandising.