Amazon CEO Jassy: Stores Growing Fast, Units Up Nearly 15% This Year
Amazon CEO Andy Jassy told investors on the company's third quarter earnings call that some observers are underestimating the progress of Amazon Stores. According to Jassy, units have grown nearly 15% year over year so far this year, on top of more than 30 billion items sold last year.
- Jassy says Amazon Stores units are up nearly 15% year over year, year to date.
- Amazon added more than $90 billion in gross sales over the trailing 12 months.
- Amazon Now is available in over 450 towns and cities, with items ordered up 10x year over year.
- Grocery gross sales reached nearly $250 billion in the trailing 12 months.
- Amazon is on track to cut cost to serve per unit for the fourth consecutive year.
Growth at scale, according to Jassy
Jassy argued that "some folks are sleeping a bit on how much progress that business has made." He said he is not aware of another retail business approaching Amazon's revenue size, which he put at hundreds of billions of dollars, with double digit operating margins inclusive of Ads, that is growing at this pace.
The figures Jassy cited, as reported by Amazon:
- Units are up nearly 15% year over year, year to date.
- Amazon added more than $90 billion in gross sales over the trailing 12 months.
- It adds about double the gross sales per quarter of its next largest U.S. competitor, according to Jassy, and is consistently taking retail market segment share.
- The North America and International segments have each expanded operating margins by nearly 10 percentage points over the past few years.
Jassy said those margin gains allow Amazon to reinvest in the customer experience. He also stressed that it is still early: nearly 80% of retail currently occurs in physical stores, a share he expects to eventually flip to ecommerce.
Faster delivery and lower cost to serve
Jassy named four priorities: faster delivery, cost to serve, groceries and pharmacy, and AI shopping. He described them as "force multipliers."
On speed, Amazon says it had its fastest Q3 ever globally and delivered more than 1.5 billion items to Prime customers same-day or overnight in the quarter. The company is investing in its Same Day network as well as the Amazon Now and Amazon Prime Air ultra-fast services.
Amazon Now is now available in over 450 towns and cities, and the number of items ordered through it is up 10x year over year, according to Jassy.
On costs, Amazon is on track to reduce cost to serve per unit for the fourth consecutive year. Jassy said this lets the company continue meeting or beating competitors' prices while cost-effectively delivering a broad selection of fresh groceries and everyday essentials.
Groceries pull customers into other categories
Jassy said faster delivery is fueling the Grocery business, including perishables and everyday essentials. Gross sales there grew to nearly $250 billion in the trailing 12 months. In Q3, fresh groceries and everyday essentials grew about 3x faster than the rest of the store and represented about half of all units sold.
Grocery shoppers also spend more elsewhere, per the company:
- Customers who shop perishables with Same-Day Delivery buy nearly 7x more everyday essential units than those who do not.
- Active grocery customers shop nearly 4x more non-grocery categories, such as home and apparel, and spend over 2x more on those categories than non-grocery customers.
What it means
The remarks position speed and grocery as the main engines of Amazon's retail growth, with lower unit costs supporting competitive pricing. Amazon presents the shift from physical stores to ecommerce as a long runway. The statements come from the company's own earnings commentary, and the comparisons with competitors are Jassy's claims. The source does not give further detail on pharmacy or AI shopping results.
