In this file:
· Amazon Sees Grocery Sales Triple, Net Sales Up 40%
· Amazon’s online grocery sales triple in Q2 as more people get food delivered amid pandemic
· Amazon advertising revenue jumps 41%
· Amazon cloud revenue growth slows to 29% in Q2
Amazon Sees Grocery Sales Triple, Net Sales Up 40%
By Abby Kleckler, Progressive Grocer
Amazon sales surpassed all estimates for the second quarter, proving that shoppers continued to turn to the online giant during the COVID-19 pandemic. Reporting after the closing bell Thursday, Amazon's net sales increased 40% to $88.9 billion in the second quarter, compared with $63.4 billion in the second quarter of 2019.
Grocery sales were also a bright spot during this time period. Amazon increased grocery delivery capacity by over 160% and tripled grocery pickup locations to support customers not wanting to shop in stores during COVID-19. The result was that grocery sales tripled in the second quarter when compared with the same period last year.
Amazon noted that it's continuing to work closely with the U.S. Department of Agriculture to expand access to online grocery shopping for people who rely on Supplemental Nutrition Assistance Program (SNAP) benefits. Amazon now offers online SNAP in 39 states and the District of Columbia.
Amazon's physical stores suffered the same fate as many other retailers during the second quarter. Physical store sales were down 13% to $3.774 billion compared to $4.330 billion compared to the second quarter of 2019. A portion of the decline may be attributed to how Amazon reports physical store sales. Unlike other retailers, Amazon's physical store sales reflect only those sales where customers physically select items in a store. Orders placed online with Whole Foods Market, either for curbside pickup or delivery, are classified as online sales. The approach is opposite of how retailers such as Kroger, Walmart or Albertsons account for digital sales and tends to obscure the true performance of Whole Foods, especially as more shoppers choose digital methods of fulfillment.
As founder and CEO Jeff Bezos predicted earlier this year, Amazon spent over $4 billion on COVID-19-related costs during the second quarter, including personal protective equipment, increased cleaning, new safety process paths, backup family care benefits and bonuses to front-line employees and delivery partners...
Amazon’s online grocery sales triple in Q2 as more people get food delivered amid pandemic
by Taylor Soper, GeekWire
July 30, 2020
Amazon saw online grocery sales triple year-over-year during the second quarter as more customers get their groceries delivered versus going to a physical store amid the COVID-19 pandemic.
Amazon revealed the growth rate as part of its second quarter earnings report. The Seattle-based company blew past analyst expectations, reporting $88.9 billion in revenue and $5.2 billion in profits, despite spending $4 billion on COVID-19 initiatives.
Customers are relying on Amazon for online shopping as physical stores are closed or operating under social distancing mandates due to the health crisis.
Amazon, which owns Whole Foods, said it increased grocery delivery capacity by more than 160% and tripled grocery pickup locations during the second quarter.
“We’re reaching more customers with our grocery offerings,” Amazon CFO Brian Olsavsky said on a call with analysts Thursday.
A survey from RBC Capital Markets in April found an “accelerated secular shift to online grocery shopping” driven by the pandemic, with companies including Amazon, Walmart, and Instacart benefitting.
“We believe that online grocery shopping may now be coming a habitual practice among shoppers,” RBC analyst Mark Mahaney wrote.
Amazon doesn’t break out online grocery sales in its financial statements. Its physical store category, which primarily includes sales from Whole Foods, saw revenue drop 13% to $3.8 billion during Q2. But sales from customers who buy groceries for delivery or pickup from Whole Foods are included in Amazon’s online sales category, which was up 49% to $45.9 billion...
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Amazon advertising revenue jumps 41%
By Chris Pash, AdNews (AU)
31 July 2020
The rapid expansion of advertising services by global retail giant Amazon continues despie the COVID-19 pandemic.
Amazon posted a 41% jump to $US4.2 billion in revenue generated mostly by advertising in the second quarter compared to the same three months last year.
As a proportion of the whole Amazon business, advertising is still small but growing. Amazon is now ranked third behind Google and Facebook for digital advertising.
Overall, Amazon had set sales of $US88.9 billion, up 40%, in the second quarter.
Amazon advertising revenue is expected to hit $US13 billion by the end of 2020.
eMarketer principal analyst Andrew Lipsman says advertising is a key growth area for Amazon.
"Amazon has strengthened its future position in key growth areas like grocery, health and advertising," says Lipsman.
Amazon’s ad business has attracted increases in spending because advertisers can reach consumers during product queries, a time when they’re ready to buy.
And the company has rolled out measurement and targeting tools, making it even more attractive for advertisers.
In Australia, Amazon advertising launched in April 2019...
Amazon cloud revenue growth slows to 29% in Q2
o Amazon Web Services expanded its operating margin, although revenue growth slipped below 30% for the first time in the second quarter.
o Microsoft’s Azure cloud revenue growth slowed meaningfully in the same period.
Jordan Novet, CNBC
Jul 30 2020
Amazon’s cloud division grew its revenue by 29% year over year in the second quarter as the pandemic hit some of its large customers, including Lyft. Growth slowed from 33% in the first quarter.
Amazon Web Services leads the market for remote delivery of computing power and data storage for third-party applications. It has become a major component of the digital supply chain for online services, including Intuit and Workday, along with companies outside the technology industry, including Hess and Kellogg. For the past five years AWS grew faster than Amazon’s other segments and given Amazon the majority of its operating profit. But this time, things changed.
AWS revenue totaled $10.81 billion in the second quarter, less than the $11.02 billion consensus among analysts polled by FactSet. That represents 12% of Amazon’s total revenue, down from 13% in the year-ago quarter as Amazon shipped products to customers during the pandemic. For the first time at least since the first quarter of 2015, AWS wasn’t the fastest growing segment. The North America segment grew 43% on an annualized basis, Amazon’s international segment grew 38%, Amazon said in a statement.
Brian Olsavsky, Amazon’s chief financial officer, talked about what happened during the quarter on a conference call with analysts on Thursday:
So on AWS, segment revenue, what we see are companies working really hard right now to cut expenses, especially in the more challenged businesses like hospitality and travel, but pretty much across the board. We’re helping them, we’re actively, with our sales force, looking for ways that we can help them save money. This includes things like scaling down the usage where it makes sense or benchmarking their workloads against our architectural best practices. So that’s not going to help our usage growth in the short run, but it helped those customers save money, and we think that’s the right thing to do, not only for their success, so they can come out of this in better shape, but also for the long-term health of our relationship with them ... .
We’re also seeing a lot of companies that are really wishing that they had made more progress on the cloud because they’re seeing all companies that are on the cloud can ... scale up or scale down depending on their particular situation. They realize their on-premises infrastructure is not really flexible up or down, and especially in a time of sinking demand, it’s a big fixed cost for them.
So we expect...
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