Amazon touts perishables growth in Q3

Fresh groceries continue to be a significant focus for Amazon as it ramps up rapid delivery and continues to expand the footprint of its Whole Foods banner.

Speaking during the company’s earnings call with analysts on Thursday, Andrew Jassy, president and CEO of Amazon, said sales of perishables and everyday essentials grew about three times faster than the rest of its store in the third quarter, representing about half of all units sold.

“Increasing speed is fueling our grocery business, including perishables and everyday essentials,” he said.

During the past year, monthly orders of fresh groceries placed by Amazon Prime members for free same-day delivery have more than tripled. In addition, customers who shop perishables with same-day delivery buy nearly seven times more units of everyday essential items than those who don’t shop for perishables.

“A lot of grocery starts with perishables,” said Jassy. “And so we really are excited that we feel like we found something with shipping perishables out of our same-day facilities.”

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Grocery shoppers also fuel sales of non-grocery items such as home goods and apparel, he said.

Amazon does not break out sales of Whole Foods separately from the rest of the company, but it said that business continues to grow at a rapid pace. About half a dozen new locations are slated to open in November, including a new flagship store in Los Angeles.

The company also reported that its pharmacy business continues to expand, with the number of customers using it up more than 60% year-over-year.

Amazon also said that its customers are increasingly using Alexa for Shopping, its AI shopping assistant. In the last 12 months, 400 million customers have used Alexa for Shopping, and customer interactions with the service were up 570% year over year. U.S. customers using Alexa for Shopping are spending 50% more per order than those who do not use it, the company said.

Despite the strong performance in grocery, Amazon’s Q3 earnings fell short of analysts’ expectations. The company reported earnings per share of $1.89 and revenue of $201.9 billion, compared with Bloomberg’s analyst consensus earnings estimates of $1.97 per share and $202.25 billion in revenues, according to reports.

Ad revenues fell short of expectations, while ongoing investments in AI reduced the company’s cash flow in the quarter, the reports said.