Amazon CEO Talks Grocery Potential

In his annual letter to shareholders, leader Andy Jassy shares more growth opportunities in digital and physical spaces

4/12/2024

As Amazon tweaks its Amazon Fresh concept, leader Andy Jassy said that same-day fulfillment centers can also be used to meet shoppers' needs.

In his annual letter to shareholders this week, Amazon President and CEO Andy Jassy addressed several aspects of the retail behemoth’s grocery business, including items sold through its site and at its Amazon Fresh and Whole Foods Market physical stores.

There were some key takeaways in his missive:

Amazon is pursuing simultaneous paths to grocery growth. Jassy noted that Amazon can leverage its 58 same-day fulfillment facilities within its store business, which handle top SKUs, to provide a better grocery-shopping experience for customers. While Amazon is working on enhancements to its Amazon Fresh stores and growing its organic grocery sales with Whole Foods, the same-day facilities also have great potential, he said. “What if we used our same-day facilities to enable customers to easily add milk, eggs, or other perishable items to any Amazon order and get same day? It might change how people think of splitting up their weekly grocery shopping, and make perishable shopping as convenient as non-perishable shopping already is,” the CEO wrote.

Some plans are up in the air, literally. Jassy reported that Amazon’s Prime Air delivery drones are making progress and will eventually allow the company to deliver packages to customers in less than an hour. “It won’t start off being available for all sizes of packages and in all locations, but we believe it’ll be pervasive over time. Think about how the experience of ordering perishable items changes with sub-one-hour delivery?” he pointed out.

Groceries and health care are increasingly intertwined. In line with other recent movements fusing health care and grocery, such as the food-as-medicine focus and retailers’ ventures into clinical care, Jassy shared that customers are asking Amazon to help them with health and wellness opportunities, adding that those options “can be partially unlocked with some of our existing grocery building blocks, including Whole Foods Market or Amazon Fresh.”

Looking forward after a fiscal year marked by a 12% gain in year-over-year (YoY) revenue, Jassy affirmed that the company is continuing to focus on its technologies, including advancements in generative AI, and “being sharp” on price as consumers remain mindful of spending. In his conclusion, he pointed out that Amazon is operating at a time of continual unprecedented change that comes with new possibilities for growth. “There has never been a time in Amazon’s history where we’ve felt there is so much opportunity to make our customers’ lives better and easier. We’re incredibly excited about what’s possible, focused on inventing the future, and look forward to working together to make it so.”

Seattle-based Amazon is No. 2 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century.