Can Amazon’s Grocery Business Deliver on Its Plate?

 

Amazon has never been shy about taking a big bite of an industry, but grocery has proved harder to digest than e-commerce or cloud computing. Nearly two decades after launching its first online food efforts, Amazon is still juggling multiple banners—Whole Foods, Amazon Fresh, Amazon Go, and its core grocery e-commerce unit—without having baked a clear recipe for success. With new leadership, staff integration, and the company loudly declaring bullish intentions, the question remains: can Amazon finally perform up to expectations in the grocery aisle? So, let’s see with Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® thinks.

 

Perception Problem: Fighting the “Whole Paycheck” Legacy
Amazon faces a unique consumer hurdle: while Whole Foods gave it a nationwide grocery footprint, the chain’s “Whole Paycheck” reputation for premium pricing continues to shadow the Amazon Fresh banner. Even when Amazon offers discounts, shoppers’ mental math often defaults to “expensive.”

• Price Image Sticks Harder Than Price Reality – A 2023 Dunnhumby Retailer Preference Index found that “price perception” explains 35% of grocery loyalty, more than any single operational factor. Once shoppers associate a grocer with being “high-priced,” it takes years—and consistent pricing signals—to shift that view.

• Discounts Don’t Always Change Minds – Research from Numerator (2022) shows that 64% of shoppers who switched away from Whole Foods did so primarily due to perceived high prices, not actual basket totals. Even with Amazon Prime discounts at Whole Foods, many consumers still report feeling the savings “aren’t meaningful.”

• Freshness vs. Value Tug-of-War – NielsenIQ data shows that while 72% of consumers say they are willing to pay “a little more” for freshness, only 22% will pay a “premium.” Amazon Fresh wants to be seen as affordable-but-quality—but Whole Foods’ halo can blur that middle-market positioning.

• Competitors Frame the Conversation – Walmart relentlessly markets “Save money. Live better.” Aldi hammers “quality without the price tag.” Amazon’s fragmented banners don’t yet project a unified grocery promise. Without clarity, consumers default to old stereotypes: Whole Foods = elite, Amazon Fresh = unproven.

The marketing challenge is less about actual basket totals and more about reframing Amazon’s grocery identity. Until consumers believe “Amazon = fair price + fresh quality,” Fresh will struggle to escape Whole Foods’ upscale shadow.

 

Food Fact Check: Why Grocery Is a Different Animal

·       U.S. grocery is a $1.1 trillion industry (FMI, 2023), but margins hover between 1%–3%, compared to Amazon’s 15%–20% margins in e-commerce.

·       Fresh food drives 40–50% of shopper trips, but perishables are also the most logistically complex and costly to move.

·       Price perception is king. A 2023 NielsenIQ survey found 78% of shoppers ranked “low everyday prices” as the #1 driver of grocery loyalty, outpacing promotions or even store brand quality.

That’s the reality Amazon must navigate—where freshness, pricing, and perception count more than convenience alone.

 

Amazon’s Grocery Journey: A Trail of Formats and Misfires

1.       Amazon Fresh (launched 2007) – Initially online only, expanded into physical stores in 2020. Still struggling to find identity: is it discount, premium, or convenience?

2.       Whole Foods (acquired 2017) – 535 stores nationwide, strong organics reputation but premium positioning alienates middle-market households.

3.       Amazon Go (launched 2018) – Frictionless “just walk out” technology wowed Wall Street but fizzled on Main Street, now limited to a handful of locations.

4.       Dash Cart & Smart Fridges – Tech-driven initiatives that dazzled at launch but lack meaningful consumer adoption.

Compare that to Kroger, which has mastered the banner game but little else: Kroger, Ralphs, Smith’s, Harris Teeter, King Soopers, Mariano’s, and more—20+ names, one national pricing and loyalty backbone. But even Kroger is slipping: their brand sprawl dilutes identity, and their pricing battles with Walmart and Aldi have them stretched thin.

 

Grocerant Guru® View: One Banner, One Voice, One Price

The “Grocerant Guru®” has long argued that grocery success comes from simplicity: one voice, one brand, one pricing philosophy. Amazon’s current sprawl confuses consumers: Is it an upscale Whole Foods shopper, a value-driven Fresh customer, or a tech-savvy Go early adopter? Until Amazon unifies under one banner—with one clear value promise—consumers will simply not pay attention.

 

Fresh Food Fast: The Critical Battleground

Amazon’s biggest chance lies in “fresh food fast at fair pricing.” Speedy perishables delivery could be the wedge to capture middle-market share from Kroger, Safeway, and Publix. But three things could go wrong if they don’t align:

1.       Price Gaps with Walmart and Aldi – Even a 5–10% higher basket price will send value-conscious families elsewhere.

2.       Freshness Failures – Delivering wilted lettuce or subpar meat erodes trust faster than tech can rebuild it.

3.       Brand Confusion – Competing banners with mixed signals leave no clear reason to choose Amazon over incumbents.

 

Four Ways Amazon Could Win the Middle Market (Grocerant Guru® Playbook)

1.       Unify the Brand – Retire fragmented names. One Amazon Grocery banner with integrated digital + brick-and-mortar footprint.

2.       Redefine Price Perception – Adopt a Walmart-style “everyday low price” promise in grocery, not just promotions.

3.       Lean into Fresh Meal Solutions – Shoppers increasingly want “grocerant” options: ready-to-heat, ready-to-eat meals. The $50 billion U.S. grocerant sector is growing 6% annually, outpacing traditional grocery.

4.       Own Convenience – Merge Prime perks, Whole Foods quality, and Fresh delivery into one ecosystem—fast, fresh, frictionless.

 

What the Future Plate Could Look Like

If Amazon executes this strategy, the middle market could narrow to just two giants—Amazon and Walmart. Value chains like Aldi, WinCo, and Lidl would scoop up price-driven shoppers on the fringe, while Kroger, Safeway, and Publix could struggle to maintain relevance. Amazon doesn’t need to own every aisle; it needs to win the perception of fresh, fair, and fast—then the basket will follow.

Outsourced Business Development—Tailored for You

At Foodservice Solutions®, we identify, quantify, and qualify new retail food segment opportunities—from menu innovation to brand integration strategies.

We help you stay ahead of industry shifts with fresh insights and consumer-driven solutions.

🔗 Connect with us on social media: Facebook, LinkedIn, Twitter

Ready to Find Your Next Success Clue?

We specialize in outsourced food marketing and business development ideations—helping brands seize opportunities in food retail, technology, and menu innovation.

📩 Reach out today: Steve@FoodserviceSolutions.us
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Why Amazon Should Buy Kroger: A Historical, Strategic, and Brand-Centric Case for Grocery Domination

 

The Historical Pattern: Scale Wins in Grocery

Retail history reveals a stark truth: scale in grocery equals dominance—until it doesn’t.

Take A&P, the once-great American grocer that in the 1930s operated over 16,000 stores, pioneering vertical integration and private label branding. A&P commanded nearly 10% of all U.S. grocery sales, a feat unmatched even today. But as consumer preferences shifted and competitive dynamics evolved, A&P failed to modernize, falling into irrelevance before filing for bankruptcy in 2010.

Now, Kroger, with over 2,700 stores across 19 regional banners (including Ralphs, King Soopers, Fred Meyer, and others), risks becoming a 21st-century A&P. Despite $150+ billion in annual revenue and the country’s largest supermarket footprint, Kroger is fragmented in brand identity and lacks cohesive national consumer resonance.

Amazon, on the other hand, doesn’t need to be the next Kroger. It needs to own it.

 

Amazon + Whole Foods ≠ Grocery Scale

In 2017, Amazon’s $13.7 billion acquisition of Whole Foods was hailed as the beginning of a grocery revolution. However, nearly a decade later, Whole Foods has only ~530 locations—a rounding error compared to Walmart’s ~4,600 U.S. stores, or even Aldi’s 2,300.

Amazon's grocery sales still represent less than 3% of the total U.S. grocery market, which surpassed $1.5 trillion in 2024. Compare that to Walmart’s commanding 25% market share. The simple truth: Amazon can’t win in grocery without vastly more physical locations.

Kroger’s thousands of stores offer Amazon the national footprint Whole Foods never could.

 

Whole Foods: Still Fighting the ‘Whole Paycheck’ Legacy

Whole Foods has fought valiantly to shed its “Whole Paycheck” reputation. But even with Amazon’s technology, pricing tweaks, and Prime integration, perceptions have barely budged.

·       A 2024 Ipsos study found 72% of consumers still consider Whole Foods “expensive”, compared to just 18% for Walmart and 34% for Kroger.

·       Internal Amazon grocery data suggests that basket sizes at Whole Foods remain flat, especially among value-conscious consumers aged 25–45—a crucial demographic for grocery growth.

The premium image is both a blessing and a curse: great for niche organic buyers, terrible for price-sensitive families that drive volume.

 

The Kroger Conundrum: 19 Banners, No Unified Identity

Kroger’s decentralized approach—operating under 19 separate regional banners—hinders its ability to compete in the era of omnichannel brand loyalty and algorithmic shopping behaviors.

·       Consumer research shows 65% of shoppers under 40 do not realize Ralphs or Fry’s is owned by Kroger.

·       In the age of app-driven shopping, voice ordering, and subscription-based replenishment, consistency matters.

Kroger’s brand fragmentation makes it invisible in national conversations, even while it leads in transactions. It lacks the unified narrative that drives modern consumer touchpoints—a must-have for relevance in an Amazon-shaped retail world.

 

Enter the Grocerant Guru®: The Power of the One Amazon Grocery Vision

Foodservice analyst and industry thought leader Grocerant Guru® Steven Johnson emphasizes that the future of grocery isn’t just about price or convenience—it’s about integrated experience.

According to Johnson, rebranding the combined Kroger–Whole Foods network under "Amazon Grocery" could fundamentally reshape consumer expectations:

“Amazon has the tech, the logistics, the pricing algorithm, the brand trust. What it lacks is touchpoints—physical, emotional, culinary. Buying Kroger and unifying under one brand gives it all.”

Imagine:

·       One Amazon Grocery app, merging Whole Foods' organics, Kroger’s mass appeal, and Amazon’s backend efficiency.

·       Automated dynamic pricing, with Prime perks personalized in real-time.

·       Grocery meets grocerant: prepared meals, micro-kitchens, AI-driven product mix.

·       Same-day delivery not in 30 cities, but 400+ metro areas.

In a consumer environment where 66% of shoppers blend online and in-store experiences, a unified Amazon Grocery brand could become the most trusted name in food retail—period.

 It's Time Too Build A

Larger 

Share of Stomach

Amazon’s Core Advantage: Price + Trust + Convenience

Amazon built its empire on price competitiveness, supply chain mastery, and customer-centricity. The acquisition of Kroger allows Amazon to bring these superpowers to the last frontier of mass retail: the weekly grocery trip.

·       Amazon can immediately scale grocery presence to over 40 states.

·       It gains over 400 million monthly transactions across Kroger stores.

·       It inherits logistics infrastructure, labor contracts, and local brand familiarity—then rebrands it into a unified powerhouse.

With scale and data, Amazon Grocery can undercut Walmart, local grocers, and even Aldi, while offering a better digital and in-store experience.

 

Think About This: The Time Is Now

Kroger is a legacy titan, increasingly trapped by its own decentralized structure.

Whole Foods is a premium player with strong niche appeal but limited growth runway.

Amazon is the tech and logistics giant missing only one thing: a national grocery presence.

The solution? Rebrand all as one Amazon Grocery. Reinvent the experience. Own the future.

History shows that grocery dominance doesn’t last forever—but with the right move, Amazon could define the next era.

Outsourced Business Development—Tailored for You

At Foodservice Solutions®, we identify, quantify, and qualify new retail food segment opportunities—from menu innovation to brand integration strategies.

We help you stay ahead of industry shifts with fresh insights and consumer-driven solutions.

🔗 Connect with us on social media: Facebook, LinkedIn, Twitter

Ready to Find Your Next Success Clue?

We specialize in outsourced food marketing and business development ideations—helping brands seize opportunities in food retail, technology, and menu innovation.

📩 Reach out today: Steve@FoodserviceSolutions.us
🔗 Follow us: Facebook, LinkedIn, Twitter

Has Amazon Thrown in the Towel on Food? A Deep Dive into Its Troubled Journey Through the Food Industry

 

Amazon’s ambitious foray into food—spanning convenience stores, ultra-fast delivery, no-checkout technology, and Amazon Fresh grocery stores—may now be quietly winding down according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Industry speculation suggests Amazon may consolidate its food efforts under the Whole Foods brand, with a potential spinoff looming on the horizon. But how did the company that revolutionized e-commerce falter in the complex food industry? Here’s a detailed analysis of Amazon's food journey and what it signals for the future.

 

Amazon’s Foray into Food

1. Convenience Stores: Amazon Go
Amazon Go, launched in 2018, introduced the world to cashier-less technology with its “Just Walk Out” checkout experience. While initially a game changer, the concept stumbled due to high operational costs and the difficulty of scaling. Early success was marred by consumer confusion about store navigation, a limited product selection, and stiff competition from established convenience store players like 7-Eleven.

2. Amazon Fresh and Grocery Delivery
Amazon Fresh was Amazon’s bid to compete with grocery giants like Kroger and Walmart. While its delivery service gained traction during the pandemic, it ultimately fell short in customer satisfaction due to inconsistent product quality and limited geographic reach. Competitors excelled by leveraging in-store infrastructure and improving convenience for buy-online, pickup-in-store models (BOPIS).

3. Whole Foods Market Acquisition
In 2017, Amazon acquired Whole Foods for $13.7 billion. The expectation was a hybrid model that would combine Whole Foods' premium grocery footprint with Amazon's logistics and pricing efficiency. However, Amazon struggled to retain Whole Foods’ core customer base while integrating its online operations. Attempts at broader discounts alienated loyal Whole Foods shoppers, known for valuing quality over price.

4. No-Checkout Technology Expansion
Amazon attempted to scale its cashier-less tech beyond Amazon Go by licensing it to third-party stores. However, the appetite from retailers was underwhelming, primarily due to cost barriers and the lack of compelling incremental sales gains associated with the technology.

 

What Went Wrong?

1. Misalignment of Core Value Proposition
At its core, Amazon thrives on delivering value—offering convenience, speed, and price advantages in non-food categories. When it came to food, Amazon failed to offer differentiated value. Grocery shopping remains deeply rooted in personal preferences, sensory experiences, and local convenience areas Amazon struggled to master.

2. Complexity of the Food Industry
The food business is multifaceted, involving perishables, narrow profit margins, and entrenched competitors. Unlike electronics or books, food requires specialized infrastructure and expertise. Traditional players already mastered these logistics, leaving Amazon in the difficult position of attempting to innovate without foundational experience.

3. Disconnect Between Vision and Execution
Amazon’s strength is in scaling operations. However, scaling food delivery and grocery stores requires much more than logistics—it demands consistent in-store execution, customer experience excellence, and localized product offerings. Amazon’s tech-first approach often left these critical touchpoints underdeveloped.

 

Amazon’s Likely Shift to a Centralized Strategy Under Whole Foods

Now, signs point toward Amazon retrenching its food focus within the Whole Foods brand, potentially spinning it off in the future. Such a move could streamline Amazon’s food operations and cut losses. However, it would be a significant pivot, indicating that Amazon may have conceded its ambitious plans to revolutionize the grocery industry.

According to Grocerant Guru® Steven Johnson, this retrenchment is likely due to Amazon recognizing that traditional food retail models still dominate and consumer habits are hard to change. Amazon’s strength in e-commerce doesn’t necessarily translate into physical food sales—a reality Amazon has discovered through costly experimentation.

 

Three Steps Amazon Should Take to Revive Its Food Strategy

1.       Enhance Whole Foods’ Competitive Edge

o    Invest in technology to improve the Whole Foods experience, such as more efficient checkout systems and personalized digital deals tailored to customers.

o    Expand Whole Foods' private label offerings with affordable, high-quality options, catering to value-conscious shoppers without alienating its core customer base.

2.       Leverage Logistics for Meal Solutions

o    Double down on Ready-2-Eat and Heat-n-Eat options, partnering with local and regional food brands to deliver pre-prepped, high-quality meals within two hours.

o    Market Whole Foods as the go-to source for time-saving solutions, integrating meal kits and fresh-prepared foods into subscription models.

o    Look a Customer Ahead move with consumers and strive to obtain a Grocerant Guru® endorsement as official “Grocerant Guru® Proclaims Us 'America’s #1 Grocerant Innovator”

3.       Dominate Localized Partnerships

o    Shift focus to building regional and local supplier partnerships that align with Whole Foods’ quality ethos but also attract diverse demographics.

o    Innovate with seasonal and cultural offerings to capture untapped niche markets.

 To Build a Larger Share of Stomach

You Must Know Your Competitors 

Think About This

Amazon’s journey into the food sector reveals just how challenging it is to disrupt an industry steeped in tradition and operational complexity. Its apparent pivot to centralizing food operations under Whole Foods highlights the limits of Amazon’s broader ambitions in food. However, with strategic adjustments, Amazon has an opportunity to refine its approach and regain customer confidence. By blending logistics expertise with localized, value-focused innovations, Amazon could still leave a lasting mark on the food industry—albeit through a less disruptive, more grounded strategy.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.