Amazon Is Actually Redefining the Grocery Business

We and others have looked exhaustively at Amazon’s efforts to grow its share of the US grocery market. Amazon has tried in numerous ways: Amazon Fresh delivery and its variants, experiments with Amazon Fresh physical grocery stores, a broad selection of “everyday essentials” including Amazon private label products, Subscribe & Save for regular purchases, and of course buying an entire chain of grocery stores, Whole Foods.

In physical grocery stores, the featured departments that showcase the quality of the store are all perishable goods - produce, bakery, and meat and seafood. Along with dairy, they tend to constitute the “perimeter” of the store, with the less interesting and less perishable boxes, cans, and packages in the “center-of-the-store”. Amazon is succeeding in growing its center-of-the-store business through the traditional Amazon distribution system - not just the perishable friendly Amazon Fresh or Whole Foods delivery channels.

We see this by looking at how Amazon orders that contain grocery items are delivered. We start with the 37% of US Amazon.com customers that included traditional grocery store items in their most recent order. This is based on CIRP quarterly surveys of Amazon.com customers, with that figure for the twelve months ending in June 2025. Only 3% of those orders were Amazon Fresh delivery (Chart 1).