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Amazon’s physical stores eke out Q2 sales gain

Strong growth continues for online retail business

Russell Redman

July 26, 2019

3 Min Read
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Amazon.com Inc. saw virtually flat sales at its physical stores in the second quarter despite robust growth in online retail and overall company sales.

Reporting results after yesterday’s market close, Amazon said sales at physical stores totaled $4.33 billion for the quarter ended June 30, up 0.4% from $4.31 billion a year earlier. Excluding the impact of foreign exchange rates, sales rose 1%, the Seattle-based company said. Sequentially, physical-store sales gained 0.5% from just under $4.31 billion in the 2019 first quarter.

Amazon’s physical-store sales come mainly from its Whole Foods Market unit and exclude online orders made via its brick-and-mortar brands, such as Prime Now delivery and pickup through Whole Foods stores. Currently, the e-tail giant’s U.S. physical stores include 481 Whole Foods Markets, 13 Amazon Go convenience stores, 18 Amazon Books stores, three Amazon 4-Star outlets and four Presented by Amazon outlets. The company doesn’t break out sales totals for its brick-and-mortar retail segments.

Online store sales came in at $31.05 billion in the second quarter, a 14% gain from $27.17 billion a year ago. Year-over-year growth was 16% excluding foreign exchange.

Amazon’s overall second-quarter net sales jumped 20% to $63.4 billion from $52.89 billion in the 2018 quarter. The company said net sales climbed 21% excluding an $814 million negative impact from changes in foreign exchange rates.

Related:Three more Amazon Go stores on the way

Operating income rose 3.3% to $3.1 billion in the 2019 second quarter. Net income totaled $2.63 billion, or $5.22 per diluted share, compared with net income of $2.53 billion, or $5.07 per diluted share, a year earlier.

Analysts, on average, had forecast net earnings per share of $5.57, with estimates ranging from a low of $4.34 to a high of $7.85, according to Refinitiv/Thomson Reuters.

“Customers are responding to Prime’s move to one-day delivery. We’ve received a lot of positive feedback and seen accelerating sales growth,” Amazon CEO and founder Jeff Bezos said in a statement. “Free one-day delivery is now available to Prime members on more than 10 million items, and we’re just getting started. A big thank you to the team for continuing to make life easier for customers.”

In a conference call late yesterday, Chief Financial Officer Brian Olsavsky noted that while one-day shipping is a key investment focus for Amazon, the company is spending on other areas to fuel expansion.

“We certainly have a lot of areas where we continue to invest, not the least of which is our AWS [Amazon Web Services] business, devices, video, the global expansion of a lot of our Prime benefits, and things like stores and grocery delivery through Whole Foods, Prime Now and AmazonFresh.”

Related:Amazon helps lift traffic at Whole Foods

On the grocery retail side during the quarter, Amazon expanded Prime Now same-day delivery to Whole Foods stores in about two dozen new markets. The service is now available in 88 metropolitan areas in the U.S. Also, the company expanded AmazonFresh perishables same-day delivery to Las Vegas, extending the service’s reach to 15 major markets. Items ordered through AmazonFresh are delivered from Amazon fulfillment centers.

Also, two Amazon Go stores were opened in Manhattan. The cashierless concept now has 13 locations in Seattle, Chicago, San Francisco and New York, with another four in the works.

The second quarter also saw the opening of Whole Foods’ 500th store, a midtown Atlanta location that will serve as the flagship for the Southern region. The four-story location contains four eateries. Overall, Whole Foods now has 502 stores, including 14 in Canada and seven in the United Kingdom.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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