Amazon has definitely expanded its retail footprint. The first Amazon Fresh, a 35,000-square-foot location in Woodland Hills, California, opened in August 2020. The 30th opened in Murrieta, California, on May 5.
The stores include new technologies -- most notably, Just Walk Out shopping, in which shoppers can skip the checkout line by connecting to their Amazon account or credit card.
As Amazon Fresh expands, it offers a new way to combine in-store shopping and online shopping. For instance, shoppers can return items they bought through Amazon to the store (as they can with the Amazon-owned Whole Foods). Shoppers who use Just Walk Out will be sent digital receipts.
Since Amazon has been competing in the supermarket category, it appears to overmatch competitors like Kroger, Publix and Food Lion, though the No.1 chain, Walmart, is a viable competitor.
In dunhumby’s rankings, Amazon Fresh appeared at the top, along with Target, Trader Joe’s, Sam’s Club, Costco, Wegmans Market Basket, Walmart Neighborhood Basket and Fairway.
Amazon’s share of the supermarket category is still low, for now. As of 2021, Amazon and Whole Foods had 1.4% and 1.2% of grocery spending in the U.S., respectively, according to Numerator.
But Amazon has a potent weapon in its Prime membership. There are more than 100 million Americans who are Prime members, according to Statista. Membership in Prime costs $139 per year and includes two-day shipping plus unlimited movie and TV streaming on Amazon Music Prime. Prime membership also gives access to Prime Day deals and access to a 30-minute head start on non-Prime members.