Amazon's gamble on Whole Foods might not pay off

By Food and BeverageFOXBusiness

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Strategic Resource Group Managing Director Burt Flickinger on expectations for the holiday shopping season and Americans' big spending on Halloween costumes for their pets.

Amazon’s foray into the grocery world last year with its $13.7 billion purchase of Whole Foods might not be paying off.

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According to Bloomberg, the world’s biggest online retailer has continued to struggle in the $840 billion-grocery market, despite its acquisition in August 2017 of the upscale food chain.

The number of Amazon Prime members who shop for groceries at least once a month declined this year, compared with 2017, according to UBS analysts, who noted that it was “surprising,” given Amazon’s expansion of its food delivery service.

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Advisory firm Brick Meets Click in a separate study found that household access to Amazon’s grocery service is likely to rise in 2019 from 81 percent to 90 percent.

“Increasing the number of households who have access to online grocery shopping services with home delivery or pickup could add almost two points to the percentage of U.S. households who buy groceries online, pushing the 2019 monthly rate past 25% at the national level,” said David Bishop, a partner at Brick Meets Click.

Still, households spend almost three times more with a delivery or pickup service ($200) vs. Amazon ($74), according to the study.

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