Numerator: Amazon has a 3%+ US grocery market share between its branded stores and Whole Foods; UBS: physical stores made up ~90% of US grocery sales in 2022
Wall Street Journal : 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
Five years after sources said Amazon planned dozens of new grocery stores distinct from Whole Foods, Numerator's tally shows the payoff has been modest: just over 3% of US grocery share across branded stores and Whole Foods, up only marginally from an estimated 2.4% in December when coverage called the strategy unprofitable and incoherent. Walmart, by WSJ's math, still does roughly six times Amazon's grocery business.
UBS's figure that physical stores accounted for about 90% of US grocery sales in 2022 frames why: grocery is structurally a brick-and-mortar category, which is exactly why the Journal reports Bezos' successor is looking to expand Amazon's physical footprint — a pivot later echoed in tests pulling Whole Foods and Fresh into a common delivery platform rather than abandoning stores for e-commerce.
First-order effects
- Amazon's grocery bet has bought little share movement — 2.4% to 3%+ despite billions spent — leaving management under visible pressure to add physical stores instead of scaling the online model further.
- Walmart's six-to-one grocery advantage stands confirmed, and its position inside the general-merchandiser cohort that sells more than half of all groceries makes it the structural beneficiary of the 90%-physical reality.
Second-order effects
- Rival grocers keep investing in defensive tech — smart carts, dynamic price tags, automated warehouses — because the Amazon threat, not shopper demand, forced experimentation on a risk-averse industry.
- With online capped near 10% of the category, Amazon's fulfillment-network consolidation signals that grocers compete on hybrid store-plus-delivery economics, shifting capital spending toward store footprints and logistics integration over pure e-commerce capacity.
Third-order effects
- If the pattern holds, US grocery consolidates around large general merchandisers with dense store networks, and any challenger's path runs through acquiring or leasing physical retail rather than disrupting past it — reinforcing the difficult-antitrust-case picture of Amazon as a dominant e-commerce player boxed out of the biggest retail category.
The trend: US grocery is proving resistant to e-commerce disruption, pushing even Amazon to build physical scale and merge store networks with fulfillment rather than disrupt the category from online alone.