Corporate Profiles - 2020 - 60

COMPANY OVERVIEW

Amazon.com Inc.
Food sector presence grows rapidly during pandemic
ith a market capitalization that topped
$1.5 trillion in 2020 and with sales
growth accelerating, Amazon.com Inc.
has been attracting no shortage of attention. Still,
parsing out developments in the company's food
business often is a challenge.
Announcing results for the second quarter ended
June 30, Seattle-based Amazon said its grocery delivery capacity increased by over 160% during the
period and its grocery pickup locations tripled in an
effort to support customers during the coronavirus
(COVID-19) pandemic. Online grocery sales tripled
in the second quarter when compared with the
same period last year.
The company said it was working closely with
the US Department of Agriculture to expand access to online grocery shopping for people who rely
on Supplemental Nutrition Assistance Program (SNAP) benefits. The company said it now
reaches beneficiaries in 39 states and Washington,
giving more than 90% of SNAP households the
ability to use their SNAP benefits online.
Earlier in the year, Amazon offered greater details
about its experience during the first weeks of the
pandemic. In an April 30 conference call with investment analysts, Brian T. Olsavsky, senior vice president
and chief financial officer, said the company had taken steps to make its stores safer for employees and

customers - plexiglass barriers between cashiers
and customers were added and reserved special
hours for senior customers to shop. Broader steps
were taken as well across the company.
"We temporarily raised wages and overtime premiums; we funded a new Amazon relief fund; and we allowed employees to take unpaid time off at their discretion," he said."To deal with the unprecedented demand,
we hired an additional 175,000 new employees."
With e-commerce picking up quickly, Whole
Foods raised grocery delivery capacity by more
than 60% and expanded in-store pickup at Whole
Foods stores from 80 stores to more than 150 during the first quarter.
Asked whether consumer behaviors across the
entire Amazon system were changing because of
COVID-19, Dave Fildes, director of investor relations, highlighted the company's online grocery
business. Sales at the time were rising quickly.
"It's not isolated like you can see for physical stores,"
he said. "We have seen increased demand in online

grocery shopping, and we have a number of ways for
customers to do that, Prime Now, Fresh and then, of
course, Whole Foods online for delivery or pickup. And
really beginning in March and continuing now through
April, seeing that increased demand. So that's continued. A lot of our focus is on working around the clock
and offering as much delivery as possible."
Physical store growth during the first quarter
was 8%, Mr. Fildes said, a marked improvement
from trends in 2019 and earlier.
Earlier this year, the company opened its first
Amazon Go Grocery store, in Seattle. The company
is using the same checkout-free technology as is
used in 25 Amazon Go stores around the United
States. The technology is being made available to
other retailers for use in their stores. The company
describes "just walk out shopping" as entering the
store with the Amazon Go app loaded, selecting the
desired merchandise and walking out of the store.
"Amazon Go Grocery offers everything you'd want
from a neighborhood grocery store - from fresh
produce and meat and seafood to bakery items and
household essentials - plus easy-to-make dinner
options," the company said."We offer a mix of organic and conventional items from well-known brands,
along with special finds and local favorites."
In September, the company opened a second cashier-less grocery store, in Redmond, Wash., near the

Chief executive officer -
Jeffrey P. Bezos

Amazon net sales

Amazon net income

Amazon share price
$3,500

$3,033

$10,073

$11,588

in millions

$3,000
$2,500

$177,866

$232,887

$280,522
$2,000
$1,500

2017

60 \ October 2020

2018

2019

2017

2018

2019

Oct. Dec.
2019

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Feb.
2020

Apr.

June

Aug.

Corporate Profiles

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Corporate Profiles - 2020

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