Amazon continues to grow its grocery, pharmacy businesses

Andy Jassy headshot
Amazon CEO Andy Jassy said in an earnings call on Thursday that Amazon remains focused on “inputs that matter most to customers.” Getty Images

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Amazon’s massive cloud computing and AI business were the main drivers of the retail giant’s 11.04% revenue growth in Q3, but the Seattle, Wash.-based tech titan said Thursday that it remains focused on its grocery and pharmacy businesses.

While only representing a fraction of Amazon’s $158.9 billion in revenue for the quarter, the company saw big changes in both pharmacy and grocery.

Amazon CEO Andy Jassy said in an earnings call on Thursday that the retailer, which owns Whole Foods Market, Amazon Fresh, and most recently Amazon Grocery, remains focused on “inputs that matter most to customers.”

Those inputs include “really broad selection, low prices, fast and free delivery, and a range of compelling Prime member benefits, including our recent addition to unlimited grocery delivery from Whole Foods Market, Amazon Fresh and local third party grocery partners for $9.99 a month…”

Jassy also touted Amazon’s fuel savings discount of 10 cents a gallon for Prime members at BP Amoco and ampm gas stations.

“In a time when consumers are being careful about how much they spend, we're continuing to lower prices and ship even more quickly, and we can see this resonating with customers as our unit growth continues to be strong and outpace even our revenue growth,” Jassy said.

Jassy noted that Amazon’s annual Prime Big Deal Days sale, held Oct. 8-9, was its most successful, and the retailer is “on track to deliver our fastest speeds ever for Prime members globally,” Jassy said.

Last year, Amazon said in an email that its creation of eight geographic delivery regions across the country aims to get deliveries out faster to customers.

“Previously, if a local Amazon fulfillment center didn’t have the product a customer ordered, it would be fulfilled from other parts of the country, costing the company more and taking longer to get to the customer,” Amazon said in May 2023. “As a result, Amazon made significant changes within its operations network to create eight interconnected regions in smaller geographic areas to better serve customers.”

In the Thursday earnings call, Jassy said Amazon continues to grow its ground delivery network over the last few months, “making hundreds of changes to our U.S. inbound network” and opening more than 15 inbound buildings.

“We’re in the process of significantly changing the way we inbound items into our fulfillment network and subsequently spread them to a regional fulfillment node…” he said. “While it's still relatively early in this re-architecture, we've already improved our ability to spread inventory across our fulfillment centers by 25% year over year, allowing us to have more of the requisite items in fulfillment centers closest to the customer, so we can compile shipments and ship to customers even more quickly.